CalPERS: Finish Mandated Thermal Coal Divestment

California Public Employees Retirement System still holds $8.5 million in thermal coal producers in violation of SB 185, a 2015 state law on thermal coal divestment. This act requires CalPERS to divest from companies that earn the majority of their revenue from thermal coal production.

When the fund divested from several coal companies in 2017, it stayed invested in three thermal coal companies that met the criteria—Exxaro, Adaro, and Banpu—because “they had indicated plans to transition their business models to adapt to clean energy generation (such as through a decrease in reliance on thermal coal mining as a revenue source).”

However, four years later, all three of these companies continue to make well over 50% of their revenue from thermal coal (according to data from the Global Coal Exit List at coalexit.org) and show few signs of transitioning their business models. In fact, all of these companies have documented expansion plans for their coal operations. Although South Africa-based Exxaro Resources recently announced that it will not acquire more thermal coal assets, it already owns more than 31 billion tons of recoverable coal, which is more than enough to create a “tipping point” for Earth’s climate.

All three coal companies have demonstrated contempt for the lives of communities displaced or impacted by their mining operations. Exxaro, in South Africa, displaces communities from mining sites in violation of the South African Constitution and with insignificant compensation leaving many communities to struggle to even find necessities like food while their air and water is irreparably poisoned.

Similarly, Adaro, an Indonesian company, strip mines forested land and continues to displace native people, threatening their lives and cultures. Adaro was also responsible for the deaths of 24 children working in mines and continues polluting surrounding areas such that water becomes undrinkable, and farmers have to abandon their land. Finally, Banpu, a Thai company, builds mines across Asia. They use open ponds to collect pollutants which inevitably enter the ground water and destroy crops. Farmers in Thailand reported being forcibly bought out and eventually forced to move because the added cost of purchasing clean water combined with the destruction of their livelihood was too much.

Join Fossil Free California and allies to call on CalPERS to finish its mandated thermal coal divestment by immediately adding Exxaro, Adaro, and Banpu to the thermal coal exclusion list.

Send Letter to CalPERS

$8 Billion More in Coal

In addition to the remaining mandated thermal coal divestments, CalPERS has almost $8 Billion in coal and coal-related investments as of June 30, 2020, according to a new report from Reclaim Finance, Urgewald, Rainforest Action Network and others. These holdings are not mandated to be divested under the terms of SB 185, but they threaten CalPERS’ ability to meet its climate targets and stated greenhouse gas reduction goals.

For more details on CalPERS’ mandated thermal coal divestments, see our Backgrounder.

Thanks to Professor Patrick Bond, of the University of the Western Cape School of Government in South Africa, for his invaluable research assistance on Exxaro and the complex politics and practice of South African coal mining, and thanks to Ivy Macleod and Miriam Eide for research and writing.