CalPERS Continues to Invest in Coal

CalPERS Continues to Invest in Coal

Today, Fossil Free California released a hard-hitting report, “CalPERS Continues to Invest in Coal.” This 14-page report shows that CalPERS continues to hold millions in coal producers that make the majority of their revenue from thermal coal. In fact, CalPERS even increased its investments in Exxaro, a company that qualified for divestment in 2017 but was retained by CalPERS because they said they were investing more in green energy. But Exxaro’s modest clean energy initiatives are dwarfed by its current coal operations in South Africa, and by its intent to seek permits for a six-fold expansion of its coal mining, which could be a tipping point for the climate.

In recognition of coal’s outsized contribution to human-caused climate change, in 2015 California passed a law – SB 185 – requiring CalPERS and CalSTRS to divest from companies making 50% or more of their revenue from the mining of thermal coal.  A 50% share of revenue sets a very high bar that can be reached by only the small number of “pure-play” coal mining companies that remain in business.  Many investors, including BlackRock and the State of New York, define a “coal company” with a much lower threshold of 25% or even 10%.

If CalPERS coal holdings are analyzed more broadly, using the criteria of the Global Coal Exit List, it’s clear that CalPERS holds billions in coal – coal mining companies, coal-fired utilities, coal distribution and services, and large diversified companies with substantial coal operations. Instead of winding down its investments in coal, which was the intent of SB 185, CalPERS actually increased investments in coal by $1.5 billion dollars between 2018 and 2019, for a total of $6.5 billion throughout the whole coal value chain. 

CalPERS’ coal exclusion policy is weak compared to those of many other institutional investors. By failing to set a strong coal exclusion policy, CalPERS has already lost billions in absolute value on its coal investments, and the sector continues to decline. As New York State’s Tom DiNapoli said when he decided to divest 22 thermal coal companies, “After a thorough assessment, the fund has divested from 22 thermal coal mining companies that are not prepared to thrive, or even survive, in the low-carbon economy.”

Why is CalPERS continuing to invest in this unprofitable and toxic industry? The International Panel on Climate Change says coal must be phased out entirely by 2050 to ensure a livable planet. As well, at least 80% of coal reserves cannot be burned if we are to keep global warming below 2 degrees Celsius. 

Please take a moment to share the Coal Report and the accompanying Press Release with your friends, and send an email to CalPERS at to let them know they need to divest from coal.

CalPERS’ response to our Coal Report, which they posted on their website and Tweeted out to their 80,000 followers, revealed our differing theories of change, and exposed CalPERS’ reliance on the ponderous mechanisms of the Climate Action 100+ and other coalitions rather than taking definite action to eliminate risk from their portfolio. We are grateful to CalPERS for opening this dialogue and look forward to continuing discussion.

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  1. […] Fossil Free California highlighted this in a new report published earlier this month and entitled “CalPERS Continues to Invest in Coal.” They revealed that, as with other global investors, the pension fund increased its coal exposure […]