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California pondering $15 billion divestment in fossil-fuel industry

Suzanne Potter
11 Jun 2024

State lawmakers are considering a bill which would require two public pension systems to pull about $15 billion in combined investments from the fossil-fuel industry by 2031.

Senate Bill 252 would affect the California Public Employee Retirement System, called CalPERS, and the California State Teachers' Retirement System, or CalSTRS.

Sen. Lena Gonzalez, D-Long Beach, a co-sponsor of the bill, said divestment is a moral imperative.

"We cannot leave our kids with climate risks," Gonzalez emphasized. "I see the impacts every day. I see the pollution in my neighborhood, the asthma and respiratory illnesses, all of it."

CalPERS' governing board opposes the measure, arguing its first responsibility is to maximize returns and the companies would find other, less socially conscious investors. Last November, CalPERS released a summary of a plan to move the portfolio toward net-zero by 2050, where carbon emissions from investments are evenly balanced with carbon reductions.

The bill has passed the state Senate and is now before the Assembly Committee on Public Employment and Retirement.

Gonzalez argued it is fiscally irresponsible to invest pension funds in companies such as Exxon, Chevron, BP and ConocoPhillips, calling them some of the state's largest polluters.

"It's a volatile commodity," Gonzalez pointed out. "We know that it's also on its way to being divested across the globe. We don't want to leave pensioners with these stranded assets and horrible risks financially down the road."

Hawaii, Massachusetts, Maine, New Jersey, New York, Oregon, and Vermont are among the states already moving to divest their pension funds or are considering legislation to do so.

California News Service

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