The CalPERS Corporate Knights report was a result of a collaboration between Fossil Free California and Toronto-based media and analysis firm Corporate Knights. Corporate Knights publishes an award-winning sustainable business magazine, and they have over a decade of experience performing corporate sustainability ratings.
According to a CalPERS beneficiary, “We knew CalPERS’ fossil fuel investments did environmental damage to us all. It turns out the damage was fiscal too – CalPERS took an $11.9 billion portfolio hit by persisting in dead-end investments in fossil fuels.” — Wynne Furth, Former Palo Alto City Attorney
The CalPERS Corporate Knights report shows that CalPERS’s fossil fuel investments were less profitable than their remaining stock portfolio. To achieve this, the report used 40 quarters of CalPERS’s security filings provided by S&P Capital IQ. Had CalPERS divested its 10% fossil fuel stock threshold, it would have generated an additional ~$11.9 billion in value. This would have allowed for an additional $6072 in value per CalPERS member.
However, citing fiduciary duty and the need to stay invested in order to “keep a seat at the table” and engage the fossil fuel companies (as if that would change anything), CalSTRS, CalPERS, and Colorado’s PERA have refused to divest their fossil fuel holdings.
Staying invested might make (financial) sense if fossil fuel investments were making money. But investments in fossil fuels are losing money: traditional energy has been the worst-performing sector in the S&P 500 for the last ten years.