CalPERS staff is resisting pressure to divest holdings of companies doing business in Sudan. Staff recommended the investment committee of the $210 billion California Public Employees' Retirement System, Sacramento, adopt a seven-point statement favoring constructive engagement with such companies.
"CalPERS believes that constructive engagement is the most powerful tool investors can use to effect change at those portfolio companies whose corporate governance, social or environmental practices could lead to value destruction," the proposed statement reads. "Divestment is a tool that must be used sparingly and in unique circumstances."
The investment committee will meet May 15 to review the staff recommendation.
Other California public funds have recently voted to divest Sudan-related securities, and a bill now in the state Assembly would force CalPERS and the $142 billion California State Teachers' Retirement System, Sacramento, to divest themselves of companies doing business with the government of Sudan by Jan. 1, 2008. CalPERS staff is in discussion with the bill's sponsor, Assemblyman Paul Koretz.
In addition, CalPERS staff hired F&C Asset Management, to assist the fund in engaging companies doing business in Sudan, a staff memo said.
