The CalPERS investment committee by an 11-1 vote Monday approved investment staff's recommendation to take no official position on state legislation calling on both the pension fund and CalSTRS to divest from investments in coal companies.
But despite remaining neutral on the bill introduced by Senate President Pro Tem Kevin de Leon, CalPERS investment staff, led by Chief Investment Officer Theodore Eliopoulos, have said they oppose divestment in general. Staff had argued CalPERS' investments in coal companies allow the pension plan to engage companies to put in place better environmental practices.
The majority of board echoed those thoughts.
“I think we may want to divest of coal and maybe even a broader range of fuels, but it ought to be an economic decision, not a political decision,” said board member J.J. Jelincic. “I am troubled that this does not apply to the state's own money. It does not apply to any other pension fund other than PERS and STRS.”
Theresa Taylor, the one board member who cast a dissenting vote, said CalPERS needed to act to divest from coal companies, to make a statement on climate change.
The move by the board of $300.5 billion California Public Employees' Retirement System, Sacramento, comes as the $190.8 billion California State Teachers' Retirement System, West Sacramento, directed investment staff on April 3 to study whether the pension fund should begin divestment of coal companies.
However, despite the study, CalSTRS CIO Christopher J. Ailman said he is opposed to divestment of securities in general.