At CalPERS’ Investment Committee meeting on June 19, board members and staff failed to respond to a direct question about the fund’s plans to meet the California legislature’s July 1 deadline for divestment from thermal coal.
Senate Bill 185, signed into law in 2015, requires CalPERS and CalSTRS, the two largest public pension funds in the U.S., to divest from companies receiving at least half their revenue from coal used to fire power plants. The bill gives the funds until July 1, 2017 to complete divestment unless they can state that selling their coal holdings violates their fiduciary duty to members and beneficiaries. SB 185 was the first divestment bill passed by a state legislature in the U.S.
In May, a CalPERS Investment Committee action item on SB 185 compliance was removed from the public agenda and added to the executive session agenda. Janet Cox, CalPERS project lead for Fossil Free California, asked during public comment on Monday about CalPERS’ decision. “The public, the legislature, and all of the fund managers who watch CalPERS want to know whether you plan to comply with SB 185,” she said. “We’re only asking that you tell us.”
Neither board members nor staff responded to Cox’s question.
In contrast to CalPERS’ silence, CalSTRS has moved publicly to comply with SB 185. The CalSTRS board voted unanimously to divest from U.S. coal companies in February 2016. After extended public discussion and release of a comprehensive staff report, CalSTRS voted to divest from non-U.S. coal on June 7 of this year.
In the U.S. and globally, coal stocks have lost much of their value in recent years as both production and consumption of thermal coal have declined, and natural gas and renewables have become price competitive with coal. (See sources linked here: https://www.vox.com/energy-and-environment/2017/3/21/14988436/global-coal-boom-decline) Burning coal causes smog and respiratory disease as well as producing the greenhouse gases that contribute to global climate change.