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Oct 11, 2015

CalPERS to meet with thermal coal companies to discuss divestment

Fund to sell $57 mn of stocks after passage of California divestment law

CalPERS is meeting with executives of 27 thermal coal companies as it considers how to divest from them after California’s state legislature passed a law requiring the divestment, the pension fund says.

CalPERS plans to sell all shares in these coal companies in its portfolio, worth about $57 mn, by July 2017 to comply with the law, which was passed by the state legislature in early September and signed by Governor Jerry Brown last week. The law is the first of its kind in the US.

‘CalPERS has a long history of constructively engaging companies to advance sustainable business practices,’ says Anne Stausboll, CEO of the pension fund, in a press release. ‘CalPERS has been at the forefront of tackling climate change issues through policy advocacy, engagement with portfolio companies and investing in climate-change solutions.’

Stausboll, who also serves as co-chair of Ceres, the coalition of investors and environmental groups, says her fund is ‘committed to encouraging our investment managers, portfolio companies and policy makers to engage in responsible environmental practices as part of our duty as a principled and effective investor.’

Passage of the divestment law follows an attempt at a similar law last year. Then, CalPERS successfully called for a delay to give the fund time to engage with companies before divesting. As signed, the law also requires fellow Californian pension fund CalSTRS to divest its holdings in thermal coal companies, estimated at less than $7 mn.

‘Coal is losing value quickly and investing in coal is a losing proposition for our retirees; it’s a nuisance to public health and it’s inconsistent with our values as a state on the forefront of efforts to address global climate change,’ says Kevin de León, the senator who led efforts to pass the law, in a statement. ‘California’s utilities are phasing out coal, and it’s time our pension funds did the same.’