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California Senator Seeks to Require Calpers to Divest Coal

The California Public Employees’ Retirement System, the biggest pension in the U.S., would be required to divest its holdings in companies that produce coal under a bill to be introduced by the leader of the state Senate.

Senate President Pro Tem Kevin de Leon, a Democrat from Los Angeles, said he will introduce legislation in January to order Calpers and the California State Teachers’ Retirement System, the second-largest U.S. pension, to begin to divest completely from coal.

Calpers, with assets of $294 billion, had about $45.9 million in coal and consumable fuels holdings as of Sept. 30, according to data compiled by Bloomberg. Its largest holdings were in Consol Energy Inc. (CNX), $19.4 million; Peabody Energy Corp. (BTU), $7.2 million, and Alliance Resources Partners LP , $5.2 million, the data show.

“California is leading globally on climate change and clean energy -- and our shared financial resources should reflect that,” de Leon said in remarks prepared for delivery today at a climate conference in Oakland. “California has prohibited its energy companies from buying or importing coal power, and the state’s funds should match that.”

Biggest Divestor

The measure, if passed by lawmakers and signed into law by Governor Jerry Brown, would make Calpers the largest pension to end investment in coal. Stanford University in May announced its endowment would no longer make direct investments in coal companies.

Brad Pacheco, a spokesman for Calpers, said engagement with companies is the most effective form of communicating concerns over climate change issues.

“We look forward to continuing a meaningful dialogue with experts and stakeholders,” he said in a statement.

A divestment movement has spread to hundreds of college campuses across the U.S. in the past two years, though few have altered their policies. Harvard University, the world’s richest university, has declined repeated calls by students and faculty to sell its holdings of fossil-fuel companies. Brown University also declined to divest from coal companies after a student campaign.

Source: Bloomberg