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California Senate passes bill requiring CalPERS, CalSTRS to divest from coal

The California Senate voted 22-14 in favor of legislation calling on both CalPERS and CalSTRS to divest from investments in coal companies.

The bill, introduced by Senate President Pro Tem Kevin de Leon, requires the $304.1 billion California Public Employees' Retirement System, Sacramento, and $193.1 billion California State Teachers' Retirement System, West Sacramento, to liquidate holdings in thermal coal companies by July 1, 2017, if officials cannot conclude the companies are transitioning their business to cleaner energy generation.

In April, CalPERS' investment committee approved the investment staff's recommendation to take no official position on the legislation. CalSTRS Chief Investment Officer Christopher J. Ailman has said in the past he is opposed to divestment of securities in general.

Ricardo Duran, CalSTRS spokesman, said the pension fund has no statement on the vote. CalPERS spokesman Joe DeAnda said the pension fund's board had voted to take a “no position” stance on the legislation and they have no further comment.