Don't miss our virtual SB Leadership Summit on June 1-2!

The Next Economy
#BusinessCase:
CalPERS, CalSTRS Report $5.1B Losses on Fossil Fuel Investments

A new report from Trillium Asset Management finds that California’s two major public pension funds, the largest in the nation, lost a combined $5.1 billion on fossil fuel-related investments last year.

The California Public Employee’s Retirement System (CalPERS) posted a 28 percent decline on its oil and gas portfolio, while the California State Teachers’ Retirement System (CalSTRS) lost 27 percent on a similar set of investments for the fiscal year ending June 30th. Over the same period, most other stock investments held by the two pension funds rose.

The funds’ energy losses occurred in a year when energy holdings generally fell because of plunging oil prices.

Matthew Patsky, Trillium's chief executive, emphasized the impact of volatile prices.

Changing our systems for a healthy, post-COVID world

Hear insights from Janine Benyus, Lynne Twist and Andrew Winston on how we got here — and what nature tells us about how to build a global economy that better, and more sustainably, serves the needs of humanity for today, and for the future — at the SB Leadership Summit, SB's first virtual event, June 1-2.

The research indicates a 25 percent decline in the pensions’ coal stocks alone. CalPERS lossed an estimated $540 million from stock investments in the world’s largest coals companies, while CalSTRS lost #330 million from coal investments. Among the top 100 coal companies, BHP Billiton appears to have generated the largest dollar declines for both funds.

If a new state Assembly bill succeeds, CalPERS and CalSTRS may soon have to divest from coal. SB 185 would direct public retirement systems to divest from companies with at least half of their revenue from coal mining for power plants.

“These freshly incurred losses starkly demonstrate coal’s financial risk, and illustrate the potential benefits of SB 185 to California pensioners,” said Will Lana, partner at Trillium.

In the meantime, the funds are not indicating that their investment strategies will change. CalPERS spokesperson Joe Deanda told the LA Times: "We're a long-term investor and don't focus too much on any single year's performance. It won't change our long-term investment strategy."

CalSTRS spokesperson Robert Duran said the fund is “researching” its thermal coal holdings in light of SB 185.

Trillium’s research was undertaken on behalf of 350.org, a group backing the Assembly bill to divest. Fossil fuel divestment has recently been embraced as a symbolic act for climate change action by churches, universities, cities and even prominent investment groups; while in 2014, the number of fossil-free financial portfolios rose 50 percent from the previous year.

Advertisement

More Stories

Have Sustainable Brands delivered right to your inbox.
We offer free, twice weekly newsletters designed to help you create and maintain your company's competitive edge by adopting smarter, more sustainable business strategies and practices.
Copyright ©2007-2020 Sustainable Life Media, Inc. All Rights Reserved.
Sustainable Brands® is a registered trademark of Sustainable Life Media, Inc.