CalPERS Coal Debate in Context

Marcie Frost. CalPERS CEO
Marcy Frost, CalPERS CEO

When Fossil Free California (FFCA) presented CalPERS with its report “CalPER Continues to Invest in Coal” we were impressed with the speed and scope of CalPERS’ response: the Fund took our findings very seriously. CalPERS published its response (a letter under the signature of CEO Marcie Frost) on its website and also Tweeted it out to its 80,000 followers. In its response, CalPERS asserts that staying significantly invested in coal and other fossil fuel companies is consistent with its fiduciary duty to make a 7% return on its investments; and insists that engagement with fossil fuel companies will set them on the path to a clean energy future.

Sara Theiss, a member of FFCA’s CalPERS campaign, opened the way for further dialogue with a letter in response that said, among other things, “We are at a genuine loss in trying to understand CalPERS’ recent increased investments in the thermal coal value chain… As to SB185, your letter states that the Board will review its SB185 coal divestment next year. We believe that beneficiaries, the Legislature, and the public deserve answers before that, given the millions of dollars CalPERS holds in the three SB185 companies as well as the billions in the total coal value chain. We reviewed the Annual reports and websites of Banpu, Adaro and Exxaro, which demonstrated that all three remain committed to coal as their primary source of revenue. Moreover, the current continued large coal share of revenue of each of the three companies belies whatever promises they make.”

Behind the Investment: Coal Mining in South Africa

Coaltown
Coal Town: an Essay

Two recent media resources illustrate the context of CalPERS’ investment in a company such as Exxaro, which owns the Grootgeluk mine that feeds nearby coal-fired power plants. The Coaltown essay examines coal culture in a number of dimensions, stating that the Grootgeluk mine has enough coal for 125 years at the current rate of production. A short documentary from KCET public television, “Coal Mining in South Africa”, brings together a variety of perspectives on coal and shows footage of gleaners who continue to bring up coal from an abandoned mine.

Bringing up heavy sacks from an abandoned coal mine

Although low coal prices mean that coal represents a declining share of South Africa’s GDP, coal is still central to the South African economy and about 65% of coal is consumed within South Africa. One report states that coal produces 82% of South Africa’s electricity and directly employs tens of thousands of people, providing a livelihood for workers and their dependents.