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'Moral Failure': California Dem Pulls Plug on Fossil Fuel Divestment Legislation

By Brett Wilkins - Common Dreams, June 21, 2022

"This defeat is just a temporary setback," said one campaigner. "We will organize to come back stronger to make our demand for fossil fuel divestment heard because fossil fuel companies are driving us toward unimaginable disaster."

Climate, environmental, and social justice advocates on Tuesday condemned the decision by a Democratic California lawmaker to kill proposed legislation that would require two of the state's leading pension funds to divest from the fossil fuel industry. 

"Today amidst a historic mega-drought, wildfires, and fossil-fueled public health crises, Assemblymember Jim Cooper, Chair of the Assembly Committee on Public Employment and Retirement, refused to allow Senate Bill 1173, California's Fossil Fuel Divestment Act, to be heard in his committee," Fossil Free California said in a statement. "This one-man veto allows the state's pensions to continue to invest billions from public funds into the fossil fuel industry, for now."

S.B. 1173 would have prohibited the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS)—the two largest public pension funds in the United States—from making or renewing investments in fossil fuel companies. The measure would also have required the pensions to liquidate their fossil fuel holdings by 2030. The two funds currently hold an estimated $9 billion in fossil fuel investments.

"This decision is a moral failure that disproportionately impacts young people, Indigenous communities, communities of color, and low-income communities," the coalition asserted. "Climate chaos has already cost California billions in damages and health costs from fossil fuel pollution and climate disasters. Jim Cooper, who has just been elected Sacramento County Sheriff, has reported $36,350 in Big Oil campaign contributions from this election season alone."

State Sen. Lena Gonzalez (D-33) said in a statement that "while I am deeply disappointed that my Senate Bill 1173 was not set for a hearing in the Assembly Committee on Public Employment and Retirement this week, I remain committed to the necessary and ongoing fight against the impacts of climate change on our state, and especially those communities in my district that are disproportionately impacted by the negative effects of the climate crisis."

"Teachers and state employees whose retirement futures are invested by our state's pension funds have long demanded that CalPERS and CalSTRS cease investing their money in fossil fuel companies, and this demand will only grow stronger and louder," she continued.

America’s Biggest Public Pension Fund Is Slow-Walking Corporate Climate Action, Report Charges

By Sharon Kelly - DeSmog, June 16, 2022

CalPERS says it needs to hold onto billions in fossil fuel shares in order to push polluters in the right direction – but a new report details a pattern of voting against climate proposals.

Does engaging with oil and gas giants by remaining invested in them – keeping a “seat at the table” – help in the fight against climate change? 

A new report suggests not very much – at least judging by the record of the California Public Employees’ Retirement System (CalPERS).

The report by environmental group Fossil Free California takes the public pension fund to task for its results to date, highlighting its history of pushing “the importance of corporate engagement on climate change” in public statements, while simultaneously voting against climate measures in shareholder meetings.

The report details dozens of votes against climate measures by CalPERS this year — including votes against greenhouse gas reduction targets at Royal Dutch Shell, against reporting and reducing greenhouse gas emissions at BP, and against pushing big banks to get in line with international “net zero by 2050” strategies.

In fact, CalPERS has voted against every climate resolution at major American and Canadian banks so far this year, the report claims.

The report also casts doubt on one of the biggest accomplishments of CalPERS’ engagement strategy – the election of several new members to ExxonMobil’s board of directors last year, nominated by the activist investment firm Engine No. 1. The report faults Engine No. 1’s directors for voting against two recent proposals to set greenhouse gas targets that would account for the pollution caused by the fossil fuels ExxonMobil sells, and to produce a report on low-carbon business plans.

“Despite their best efforts, CalPERS and [California’s other major pension fund] CalSTRS have failed to persuade fossil fuel companies to reduce their greenhouse gas emissions, increase their renewable energy production, or transition from fossil fuels to renewable energy,” the report concludes. “By opposing climate proposals at the very companies they claim to influence, the funds’ shareholder activism is not only ineffective – it’s undermining climate action.” 

California lawmakers are currently considering a bill that would spur these pension funds, which invest retirement funds for state employees – including many, like the state’s firefighters, who are today on the front lines of the climate crisis – to drop their investments in fossil fuel producers.

The fund has an estimated $7.4 billion worth of fossil fuel investments that the bill would require them to shed. In April, its board voted to oppose that law, arguing that it would lose its “seat at the table,” only to be replaced by investors that “may not have the same interest in long-term sustainability as CalPERS”..

CalPERS declined comment on Fossil Free California’s new report.

California Pensions Fail to Engage

By staff - Fossil Free California, June 2022

As the impacts of climate change begin to wreak havoc on our bisophere, the fossil fuel divestment movement has gained remarkable momentum. Globally, 1,500 institutions representing over $40 trillion in assets have already committed to some level of divestment from the fossil fuel industry.

Despite over a decade of pressure from their members, the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) continue to invest billions in the fossil fuel industry on behalf of their beneficiaries. Studies have shown that if CalPERS and CalSTRS had divested from fossil fuels in 2010, they would have generated an estimated additional $17.4 billion in returns by 2019.23 So why do California’s public pension funds remain invested in the fossil fuel industry?

CalPERS and CalSTRS claim they are engaging with the fossil fuel industry as stakeholders to mitigate climate change by affecting the conduct of oil, gas, and coal companies. However, a review of their 2022 proxy votes reveals that their shareholder engagement efforts are not only ineffective—they’re undermining climate action.

Download a copy of this publication here (PDF).

As California Considers Dropping Fossil Fuels from Major Pension Funds, New Report Calls Out ‘Misinformation’ on Costs

By Sharon Kelly - DeSmog, May 13, 2022

CalPERS and CalSTRS, which oppose fossil fuel divestment legislation, have “wildly exaggerated” divestment costs, according to Fossil Free California’s latest report.

A newly published report by Fossil Free California finds California’s pension fund managers are circulating divestment “misinformation” by exaggerating the costs involved in shedding their fossil fuel investments in documents prepared for state lawmakers.

California lawmakers are currently considering Senate Bill 1173 (SB-1173), California’s Fossil Fuel Divestment Act, which would require the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), to stop investing in fossil fuels before the decade is out. The move would impact billions of dollars currently invested in oil, gas, or coal on behalf of California’s teachers, firefighters, and other public employees.

The report titled “Hyperbole in the Hearings” found that the pension “funds have wildly exaggerated losses from past divestments” like those involving tobacco, firearms, and some forms of coal. It concludes that CalPERS and CalSTRS estimates for costs associated with fossil fuel divestment are also exaggerated.

Extraordinary sums of money, invested on behalf of California’s public employees and teachers, are on the line. The two pension funds have estimated holdings of $7.4 billion and $4.1 billion respectively in fossil fuel investments that would need to be divested if the law went into effect. 

ILWU Supports CalPERS Divestment from Fossil Fuels

Resolution Urging Support of SB 1173 (Gonzalez) Fossil Fuel Divestment Act
Adopted by the ILWU NCDC – March 26, 2022

WHEREAS, climate change, through rising sea levels, drought, heat waves, and increased wildfires is already negatively affecting human wellbeing, ecosystems and biodiversity; and 

WHEREAS, climate change is an issue of environmental justice, disproportionately impacting Indigenous communities, communities of color, and low income communities due to historical oppression, inequity of power, and lack of access to resources for prevention and relief; and

WHEREAS, the World Economic Forum recognizes the climate crisis as “a child-rights crisis” and says “the adverse weather events caused by a warming planet affect children first and worst”; and

WHEREAS, an analysis from the Harvard T.H. Chan School of Public Health indicates that the effects of heat, wildfires, storms, floods, and droughts can negatively affect both the physical and mental health of children. The negative effects on children’s physical health from the burning of fossil fuels and climate change include impacts on allergies, asthma, brain development, low birth weight, and preterm birth; and

WHEREAS, the American Academy of Pediatrics recognizes that the physical and mental impacts of climate change “not only directly threaten the lives and safety of children, they put them at risk of mental health problems—and can also cause lasting effects when they destroy their communities and their schools”; and

WHEREAS, a review of the psychological effects of climate change on children finds that “effects of climate change place children at risk of mental health consequences including PTSD, depression, anxiety, phobias, sleep disorders, attachment disorders, and substance abuse. These in turn can lead to problems with emotion regulation, cognition, learning, behavior, language development, and academic performance”; and 

WHEREAS, independent studies by financial consulting firms Blackrock and Meketa found divestment reduces risk, and improves, not weakens, investment returns; and

WHEREAS, a Corporate Knights study found if CalPERS and CalSTRS had divested in 2010 they would have gained $11.9 and $5.5 billion respectively by 2019; and 

WHEREAS, the International Panel on Climate Change concluded in 2018 that we have 12 years to make dramatic cuts in the use of fossil fuels (coal, oil, gas and tar sands) if we are to keep warming to 1.5o C and avoid more catastrophic change; and

WHEREAS, the fossil fuel industry is the single most powerful obstacle to addressing climate change, using their immense lobbying power in Washington D.C. and Sacramento to block climate legislation; and 

WHEREAS, fossil fuel companies' own scientists knew their products were causing climate change, but the companies kept it secret; and 

WHEREAS, to effectively address climate change, most fossil fuel reserves must remain in the ground, never to be used. This makes fossil fuel stocks a risky investment; and

WHEREAS, divestment in specific segments or business operations by CalPERS and CalSTRS is already standard practice and is specifically allowed by the California Constitution; and

WHEREAS, divestment means selling directly held or commingled assets including fossil fuel public equities and corporate bonds; and

WHEREAS, the California Climate Jobs Plan provides a comprehensive roadmap for decarbonization and just transition from a fossil fuel based economy; and

WHEREAS, The ILWU Northern California District Council has endorsed the California Climate Jobs Plan (in February 2022);

THEREFORE LET IT BE RESOLVED, that the ILWU NCDC strongly supports SB 1173 (Gonzalez) the fossil fuel divestment act. And upon passage, a copy of this resolution will be sent to Senator Lena Gonzalez’s office requesting that the ILWU NCDC be listed as an official supporter of the bill.

The Quiet Culprit: Pension Funds Bankrolling the Climate Crisis

By staff - Climate Safe Pensions, December 2021

A first-of-its-kind report ... from Climate Safe Pensions Network and Stand.earth reveals that just 14 pension and permanent funds finance fossil fuels to the tune of $81.6 billion.The report shows a comprehensive accounting of the fossil fuel exposure of 14 pension funds in one report from Climate Safe Pensions Network and Stand.earth reveals that just 14 U.S. public pension funds are the quiet culprits of climate chaos: with $81.6 billion invested in coal, oil, and gas.

With over $46 trillion in assets worldwide, pension funds are among the largest institutional investors in fossil fuels. These investments have dangerously underperformed the rest of the market, making public pensions’ fossil fuels investments inherently risky.

Pension funds’ financial influence make them a force to reckon with in the battle to confront, slow and mitigate climate change. Pension fund decision-makers must take climate protection seriously — not only for their financial well-being, but also for the well-being of their millions members.

With 10 years of data, there’s hard evidence that divestment is a winning financial strategy. The fastest way for pensions to address climate change is to divest fossil fuel holdings and invest in just and equitable climate solutions.

Read the text (PDF).

Youth vs Apocalypse: #UPROOTtheSYSTEM

CalPERS Finally Divests More Coal

By Sandy Emerson - Unison, September 24, 2021

CalPERS has finally divested from three more thermal coal companies, as required by law. Following the passage of SB 185 (2015) CalPERS divested from all but three (out of 17) selected thermal coal mining companies: Exxaro, Adaro, and Banpu.  In an email to Fossil Free California, CalPERS’ Managing Investment Director Anne Simpson said that CalPERS no longer owns those companies: “As per the earlier board discussion, the three companies were retained for further engagement, which did not make progress hence the sale.”

The divestment from the remaining three thermal coal companies from the 2017 list shows the power of stakeholder pressure. CalPERS re-started engagements with Exxaro, Adaro, and Banpu in October, 2020, after Fossil Free California published its hard-hitting report “CalPERS Continues to Invest in Coal”. At the March 15, 2021 Investment Committee Meeting, Anne Simpson stated that the companies’ responses were being reviewed and that a decision would be announced toward the end of 2021.

We celebrate the fact that FFCA’s letter-writing campaign generated 626 individual letters to CalPERS, after we sent a series of detailed letters to CalPERS executive and investment staff and published the report. This long-awaited divestment success is thanks to the persistence and commitment of pension members, beneficiaries, and concerned Californians who sent letters, made public comments, and generally kept the pressure on for CalPERS to complete its mandated divestment.

As California Burns, Teacher Pension Postpones Divestment

By Marcy Winograd - Common Dreams, September 7, 2021

As the climate crisis sent thousands fleeing wildfires in Northern California, CalSTRS, the nation's second largest public pension fund, postponed full divestment from fossil fuels for nearly 30 years.

Over objections from CTADivest, organizers within the powerhouse California Teachers Association, the retirement fund's investment committee voted unanimously September 1, 2021,to support a staff recommendation to adopt a net-zero Greenhouse Gas Emissions (GHG) portfolio by 2050 or sooner. This translates into continued "engagement" or investment in Big Oil until the date the Paris Agreement set for countries to reach net-zero carbon emissions.

What is net-zero anyway? It's the point at which GHG's released by humans are "counterbalanced," in CalSTRS' words, by removing GHG's from the atmosphere, though no one is clear on how to remove these earth-warming gases through carbon capture and storage (CCS) or if it's even possible to inject them back into the ground without burning more fuels, poisoning drinking water or triggering earthquakes.

The CalSTRS vote came two months ahead of the next UN climate conference in Scotland, where the COP26 Coalition, made up of 350.org, CODEPNK and others, is expected to turn out thousands of protesters to demand the world's nations run, not walk, toward divestment from fossil fuels, as well as militarism, a key driver of the climate crisis.

The CalSTRS Board vote to continue investing in fossil fuels also came days after the California Democratic Party reaffirmed a 2015 resolution calling on the state's pension funds to divest from fossil fuels.

Students demand that teacher pension fund revoke fossil fuel investments

By Garrett Leahy - 48 Hills, August 29, 2021

More than 500 Bay Area high school students gathered outside the San Francisco Federal Building on 7th Street Friday before marching down Market Street to City Hall, calling on the California State Teachers’ Retirement System, the state’s pension fund for California public school teachers, to divest its investment holdings in fossil fuel companies.

They pointed out that that California’s wildfires demonstrate the need to reduce emissions.

“This climate strike has been going on for years, but we’re feeling the effects of climate change,” said Anya Draves, a senior at Berkeley High School and President and Co-Founder of the Berkeley High Zero Waste Club. “With the wildfires, the red skies, the smoke…we’re the ones who are going to be living on this earth for years to come we have the energy and the voices to fight back.”

Draves was not alone in her concern about the future of the planet as the brunt of the effects of climate change begin to unfold.

Aniya Butler, a Sophomore at Oakland Charter High School and Hip Hop and Climate Justice Coordinator with Youth vs Apocaylpse, a youth-led group calling on governments and corporations to take dramatic action against climate change, expressed the importance for student action to pressure CalSTRS to divest from fossil fuel companies, saying that following reports that effects of climate change now may be, in part, irreversible, young people must put pressure on corporations, hedge funds, and other wealthy and powerful entities to invest in sustainable industries.

“After the IPCC report came out, I feel like people are opening their eyes, like ‘okay’ this crisis is real and now we have to do something about it,” said Butler. “The youth are the future, and the climate crisis is something that will affect our future. We have to recognize that if we want to live in a future where we can thrive, where we can breathe, we are going to have to be the ones out here organizing actions, calling out the government, and calling on these corporations to divest from destruction and invest in our future.”

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