CalPERS and CalSTRS are a step closer to being forced to divest from investments in coal companies following the California State Assembly’s 47-30 vote Wednesday in favor of legislation mandating the two pension funds liquidate holdings in thermal coal companies by July 1, 2017.
The bill, which the Senate passed in June, is on its way to the desk of Gov. Edmund G. “Jerry” Brown Jr.
Evan Westrup, a spokesman for Mr. Brown, said in an e-mail, “Given the serious challenge of climate change, this bill deserves careful consideration. The governor has until Oct. 11 to act.”
In April, the investment committee of the $292.9 billion California Public Employees’ Retirement System, Sacramento, approved the investment staff’s recommendation to take no official position on the legislation. Spokesman Joe DeAnda said in an e-mail that is still the case and “we’ll have more to say upon final outcome.”
Ricardo Duran, spokesman for the $191.3 billion California State Teachers’ Retirement System, West Sacramento, said in an e-mail, “CalSTRS did not take a position on the bill. We are assessing the level of thermal coal that meets the legislative definition and believe it may be approximately a $40 million holding. CalSTRS’ preference is always that of engagement.”
Mr. Duran noted that the pension fund in April already began a four-to-eight-month multistep assessment to determine the impact of possible divestment.
“Any effort to remove thermal coal from the portfolio must first meet the board’s standard of fiduciary care. CalSTRS’ first priority is, and always has been, safeguarding the financial futures of our members and their families, and to make decisions solely in the interest of our members and their beneficiaries.”