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Sacramento, California** – Ahead of its November 13 board meeting, CalPERS announced its “Sustainable Investments 2030 Strategy” to increase its investing in clean energy and sustainable funds and to double-down on “engagement” strategies with high emitters of fossil fuels. In its strategy, CalPERS acknowledges and affirms climate risk is undeniably financial risk. CalPERS recognizing that some fossil fuel holdings must be responsibly phased out is a noteworthy step toward CalPERS meeting its fiduciary duty. What CalPERS is proposing is a limited form of divestment on an unspecified timeline with no enforceability. But what CalPERS members, state workers, retirees, union members and people from every part of California demand is the comprehensive divestment from the top fossil fuel companies by 2031, as called for in Senate Bill 252.
“While we welcome and appreciate CalPERS’ newly announced steps toward climate investments, sustainable investing cannot include fossil fuel companies. The fossil fuel companies CalPERS is engaging with, even those with so-called ‘net-zero’ plans, are moving in the wrong direction, doubling down on fossil fuels and scaling back much-needed renewables, said Miriam Eide, Executive Director, Fossil Free California. “As called for in Senate Bill 252, Californian’s pension holders demand full divestment of CalPERS in the 200 most carbon-intensive fossil fuel companies. As Californians face wildfire destruction, record flooding, and climate chaos, our state pension must stop gambling workers’ hard-earned savings on toxic and risky fossil fuel investments. We will continue to fight for a fossil free California that protects pension funds, workers, and our communities.”
Additionally, CalPERS is continuing to rely on engagement to reduce the risk, with “selective exits” from companies without credible net-zero plans, taking place in the far future. Fossil fuel companies CalPERS has “engaged with,” even those with so-called ‘net-zero’ plans, are moving in the wrong direction, doubling down on fossil fuels, while the likes of Exxon and Shell are scaling back renewables.
As stated in the latest IEA report, CalPERS is attesting to market problems the fossil fuel industry faces – its products are being replaced, and that replacement will continue. The energy transition is unstoppable, and CalPERS, by staying invested in fossil fuel companies, increasingly exposes the funds to destabilization and losses. Meanwhile, its “climate solutions” 2030 investment targets mixes real solutions like renewable energy, with dangerous false-solutions , like carbon capture and storage (CCS or CCUS).
As called for in Senate Bill 252, Californian’s pension holders demand full divestment of CalPERS from the 200 most carbon-intensive fossil fuel companies. As Californians face wildfire destruction, record flooding, and climate chaos, our state pension must stop gambling workers’ hard-earned savings on fossil fuel investments. In 2023, high-risk fossil fuel investments have no place in the retirement funds of hard-working Californians. We will continue to fight for a fossil free California that protects pension funds, workers, and communities from Paradise to Paso Robles, and from Big Basin to Santa Monica. We all deserve to live and retire in safety in the climate-stabilized future we’re building together.
“It’s encouraging that CalPERS is prioritizing sustainable investments. However, anything short of divestment is not enough, especially when the impact of continuing to invest in fossil fuel companies disproportionately affects our most vulnerable communities,” said Fatima Iqbal-Zubair, Legislative Affairs Manager, California Environmental Voters. “California has set ambitious goals towards a cleaner, more sustainable future by passing SB 253 and SB 261. Now, the last piece of the puzzle to complete the corporate accountability package is divesting from state pension funds by passing SB 252.”
“CalPERS is behaving like a politician–they’ll back clean energy, but they won’t stand up to the dirty stuff,” said Bill McKibben. “In so doing, they’re helping prolong the climate crisis by decades. The hottest temperatures in 125,000 years mean the time is over for half-measures.”Bill McKibben is an author, climate activist, 350.org emeritus Board member, and co-founder Third Act.
“CalPERS is right to have concerns regarding investments for future security – a concern we all share,” said Jennifer Koney, Legislative Analyst, 350 Bay Area Action. “However, including fossil fuels in their investment portfolio and not divesting as called for by Senate Bill 252, CalPERS clearly places profit over environmental sustainability. CalPERS can –and must – do better than to sell the long term sustainability of life on our planet for misperceived short-term financial gain. Remove fossil fuels from your investment portfolio!”
“It’s encouraging to see CalPERS’ commitment and substantial investment in clean energy in its 2030 Sustainability Plan, but it’s discouraging to see its timidity in exiting investments in dirty energy companies and its continued reliance on vague ‘engagement’ with big polluters,” said Deborah Moore, Campaign Strategist at Third Act. “CalPERS’ shareholder voting record on climate resolutions is weak and its ability to influence big oil companies’ transition plans has been dismal. CalPERS needs to prioritize reducing absolute emissions in its portfolio, consistent with global scientific consensus, rather than reducing emissions intensity.”
“Third Act represents thousands of older Californians who worry about the future for their grandchildren and coming generations, as well as worry about their financial security. They do not want their money – whether it’s taxpayer funds or retirement savings – used to invest in fossil fuel companies,” said Vanessa Arcara, president of Third Act. “We are encouraged to see CalPERS’ commitment to and substantial investment in clean energy in its 2030 Sustainability Plan. But we are very discouraged to see that CalPERS plans to continue investing in dirty energy companies for a long time to come, risking financial losses and horrific climate impacts for pensioners and Californians. Science tells us we have no time to waste for sunsetting investments in high-polluting companies.
“We applaud this step in the right direction with this sustainable investment plan. But as Californians face wildfire destruction, record flooding, and climate chaos, CalPERS must stop gambling workers’ hard-earned savings on toxic and risky fossil fuel investments,” said Amy Gray, Associate Director of Climate Finance with Stand.earth “The financial case for fossil fuel divestment behind SB252 remains strong. The fossil fuel industry is structurally failing. Pension funds with long-term investment horizons must read the writing that’s been on the wall for decades: divest from fossil fuels, reinvest in climate-safe solutions, and protect returns, communities, and planet alike.”
“San Francisco Bay Physicians for Social Responsibility welcomes any move forward by CalPERS on providing sustainable investments. However, given accelerating global warming and the threats to our health at all levels, we underscore the urgent need to completely divest from all fossil fuels expeditiously to fully protect our patients and communities.”– Robert M. Gould, MD, President, San Francisco Bay Physicians for Social Responsibility
“CalPERS’ commitment to significantly increasing its investments in climate solutions is an important first step, but its timeline of net zero by 2050 is untenable. The climate crises, if not addressed, may well make the planet unlivable by the time we reach 2050. CalPERS has the potential to be an international leader in addressing the climate crises, just as they have led on governance issues over the years. If CalPERS commits to bold action now, other institutional investors will follow, leading to new technologies and industries that support a healthy planet and healthy investment returns. In the hottest year in 125,000 years, CalPERS should commit itself to investments and a net zero timeline that keeps the planet livable for all of us, ensuring CalPERS beneficiaries will still be able to benefit from their pensions.”–Ruth Holton Hodson, CalPERS Beneficiary
“I’m glad that CalPERS has finally put divestment on the table as a tool in its engagement policy, but unfortunately it is still holding on to the fantasy that engagement can push fossil fuel companies to transition. The oil majors have already flouted all CO2 reduction targets and abandoned attempts at green energy development; they should be divested immediately, not in some hypothetical future when it will be too late and climate change will be irreversible. What good will my pension be if it has funded the fire that burns down my house?”– Sheila Thorne, CalPERS beneficiary and retired member of CFA
“Governor Newsom has said the fossil field industry has covered up and lied about how dangerous fossil fuels are for the climate. Yet the best CalPERS can say is maybe at some point in the future – based on nebulous criteria – they might reduce some fossil fuel investments. The incongruity is striking and disturbing –it is time to fully divest.”– Carlos Davidson, CalPERS pensioner and California Faculty Association member
**Sacramento, California is the ancestral home and unceded lands of the Nisenan and Miwok peoples. Fossil Free California is headquartered in the ancestral lands of the Ohlone, Muwekma, Chochenyo and Lisjan peoples, in Oakland, California. We invite you to advance Indigenous leadership by supporting Sogorea Te Land Trust and Indigenous Environmental Network.