On June 7, CalSTRS’ powerful Investment Committee unanimously approved divestment from non-US thermal coal. This completes the divestment process set in motion by SB 185, and follows last year’s divestment from domestic thermal coal.
Board President Harry Keiley said in a news release that “environmental risks inherent in burning thermal coal for energy production represent a material impact and threat, not only to the fund, but also to the wellbeing of the planet.” State Treasurer and Board member John Chiang commented that “coal is a fuel of America’s past”, and State Controller and Board member Betty Yee added that “the regulatory risk and environment impacts of climate change places on the fund far outweighs the ability of thermal coal companies to continue to create long-term value.”
Board members including State Controller Betty Yee, Jeree Glasser-Hedrick representing State Treasurer John Chiang, Investment Committee Chair Harry Keiley, and Thomas Unterman all spoke in favor of Ms. Glasser-Hedrick’s motion to divest. They emphasized CalSTRS’ determination to fight global climate change and support the Paris climate agreement
SB 185, authored by Senate President pro Tem Kevin de León and signed by Governor Jerry Brown in September 2015, required CalSTRS and the California Public Employees’ Retirement System (CalPERS) to divest from companies that receive at least half of revenues from extraction, processing, or sale of coal used in power generation. The landmark legislation was the first fossil fuel divestment law enacted in the U.S. It was supported by 350.org, Fossil Free California, and allies around the state.
The CalSTRS Board voted to divest its U.S. thermal coal holdings in February 2016. CalSTRS coordinated with CalPERS in engaging with international coal companies, a process that included sending staff to India to interview coal companies. The CalPERS Investment Committee meets on June 19, their last meeting before the July 1 divestment deadline. A discussion of coal divestment in response to SB 185 was moved to executive session last month.
CalPERS and CalSTRS are the largest public pension funds in the US. It is Fossil Free California’s view that through disciplined yet steady removal of significant investments in fossil fuel companies and related enterprises, CalSTRS and CalPERS can both contribute to reducing the acceleration of climate change while protecting the investments of the taxpayers of California and their state employees from a crash of the carbon investment bubble. We are encouraged that CalSTRS acted within the timeline specified in the Thermal Coal Divestment statute and undertook decision-making in public meeting.
Harry Keiley said about the decision, “while reflecting the portfolio risks, it is also a statement from the board to the global marketplace that we will not tolerate the deleterious effects of climate change, regardless of the recent actions taken by the federal government.” In this statement the CalSTRS Board joins other climate leaders from California and around the country who have been galvanized by the administration’s withdrawal from the Paris Accords to do even more in order to protect the planet from devastating climate risks.