Report reveals CalPERS, CalSTRS exaggerate cost of divestment

New report exposes pattern of misinformation on fossil fuel divestment from two largest public pension funds in U.S.

(California) — A first-of-its-kind comprehensive report released today from Fossil Free California reveals that the combined $800 billion California Public Employees’ and State Teachers’ Retirement Systems have repeatedly given incorrect and inflated figures on the costs of divestment, including in the numbers reported to the Appropriations Committee last month for SB 1173, the Fossil Fuel Divestment Bill. This report comes ahead of anticipated Senate Committee and floor votes this month.

The full report can be found here.

The “fiscal impact” analysis for the Appropriations Committee in the state Senate or Assembly can make or break a bill. By wildly exaggerating losses from past divestments, claiming that there are huge transaction costs associated with divestment, and claiming that fossil fuel divestment will cost the funds billions in losses, CalPERS and CalSTRS are obstructing the legislative process.

Tom Sanzillo, Director of Finance for the Institute for Energy Economics and Financial Analysis, said: “You cannot be romantic about business decisions. When an investment starts to fail, it’s your responsibility to act. Divestment is a defensive financial move to protect funds from losses and the planet from current and future catastrophic events.”

Since the launch of the fossil fuel divestment movement, research shows early adopters of divestment strategies report neutral or positive financial results. From increasing risk of stranded assets to the doubling cost of capital for fossil fuel projects, material risks for fossil fuel corporations are long-term and structural. To date, 1500 institutions globally representing $40 trillion in assets have committed to some level of divestment.

Clair Brown, Professor of Economics at UC Berkeley, said: “My UC Berkeley research team has demonstrated that fossil fuel divestment by California Public Employees’ and State Teachers’ Retirement Systems (CalPERS and CalSTRS) is financially responsible, and in line with Gov Newsom’s Executive Order N-19-19.  CalPERS & CalSTRS Boards are acting irresponsibly to oppose divestment based upon wildly exaggerated, unsubstantiated costs estimates while ignoring the financial risk.”

Cory Jong, Teacher and Adult Supporter of UPA Warriors for Justice and Youth vs. Apocalypse, said: “When it is time for me to retire, I will need to depend on CalSTRS, and yet the longer the lies and manipulation continue, the more I feel they are losing my confidence. We need the legislature to step in and mediate the situation based on the facts and truth. The youth know the truth, if at the very least from the undeniable evidence they see in their environments, especially in places like Fruitvale where we are disproportionately impacted by environmental racism.”

Park Guthrie, CalSTRS Member and Cofounder of CTA Divest, said: “Despite years of misinformation and bias from CalSTRS, support for fossil fuel investing has collapsed among teachers. We see firsthand the terrible impacts of generational climate abandonment and fossil fuel racism on young Californians. It is time for CalSTRS executives, some of highest-paid public servants in California, to stop using teachers’ financial anxieties as a tool to realize their own fantasies about investing without boundaries or limits. We as teachers need to be able to trust that our retirement System is being straight with us.”


Contact: CJ Koepp,