Sac Bee: California pension funds won’t be forced to divest from oil, gas after bill is withdrawn

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June 22, 2022

BY WES VENTEICHER

A bill that would have forced California’s public pension systems to sell their oil and gas holdings has been dropped from a state Assembly committee agenda for Wednesday, signaling that it won’t move forward this year.

Senate Bill 1173, introduced earlier this year by Senator Lena Gonzalez, D-Long Beach, would have required the Public Employees’ Retirement System (CalPERS) and the State Teachers’ Retirement System ( CalSTRS) to sell a combined $11.5 billion worth of publicly traded securities by 2030.
 
The bill cleared the state Senate at the end of May on a 21-10 vote with nine abstentions, but was pulled Monday from a Wednesday hearing in the Assembly Committee on Public Employment and Retirement, which is chaired by Assemblyman Jim Cooper, D-Elk Grove. Cooper’s office didn’t immediately return a call Tuesday.
 
Gonzalez said in a statement Tuesday that she was disappointed, but plans to keep pushing for fossil fuel divestment at the two pension funds, which have a combined value of roughly $750 billion.
 
“I remain committed to the necessary and ongoing fight against the impacts of climate change on our state, and especially those communities in my district that are disproportionately impacted by the negative effects of the climate crisis,” Gonzalez said.
 
Climate advocacy groups such as Fossil Free California and Youth vs. Apocalypse have been urging CalPERS and CalSTRS to unload oil and gas holdings for at least eight years, and took their effort to the state Legislature with this year’s bill.
 
Directors of the pension funds have resisted divestment, saying it’s more effective to insist as shareholders that companies adopt sustainable practices than to sell off stocks that will only be bought by someone else.
 
CalPERS’ investment fund, recently valued at about $433 billion, supports the current and future pensions of about 2 million public employees, retirees and beneficiaries. CalSTRS, at $315 billion, supports about 980,000 members and beneficiaries.