California to sell-off pension fund investments in coal stocks

04 September 2015

A bill requiring California's state pension funds Calpers and CalSTRS sell their investments in coal companies was passed in the Assembly yesterday, in a major step for legislation that backers hope would inspire other funds to follow suit.

The bill, which was passed by a voice vote of 43 to 27, would require CalPers and CalSTRS - public employee pension funds that managed between them a combined $476 billion in assets - to liquidate holdings in companies that generated at least half of their revenue from coal mining by July 2017.

According to a spokesman, CalPers invested in about 20 to 30 thermal coal mining companies valued at approximately $100 million to $200 million. According to the latest report, CalPers invested in include Peabody Energy and Arch Coal, among others.

CalSTRS had around $40 million in holdings according to spokesman.

"Coal is losing value quickly and investing in coal is a losing proposition for our retirees," said senate president pro tempore Kevin de León, the bill's author.

"It's a nuisance to public health and it's inconsistent with our values as a state on the forefront of efforts to address global climate change," he said.

Prior to the vote, bill opponent, California State Assembly member Republican James Gallagher said lawmakers should not make investment decisions based on "emotionalism."

"Let's not attempt to micromanage and stop the state's public pension boards from making new investments or renewing existing investments."

"California is a world leader in the fight against climate change. Certainly we can find more sustainable and profitable investments for our public pension funds that better suit our values," said Assemblyman Rob Bonta a Democrat, who presented the bill on the Assembly floor.

The measure, called SB 185, passed the Assembly on a 43-27 vote and will now go to Governor Jerry Brown for signature.