CalPERS Takes No Position on Coal Divestment Legislation, But Prefers Engagement

CalPERS’ investment staff has spent some time studying the potential impact of legislation that could force the pension fund to divest from its coal holdings.

They delivered their findings to the fund’s investment committee on Wednesday, and concluded that engagement – not divestment – is the best way to exert influence on energy companies.

From the Sacramento Bee:

In a report to its investment committee, the CalPERS staff said dumping coal-related stocks would diminish the pension fund’s abililty to influence how energy companies do business.

“When it comes to climate change and its risks, CalPERS’ view is that the path to change lies in engaging energy companies, instead of divesting them,” said the report, co-authored by legislative affairs chief Danny Brown and chief operating investment officer Wylie Tollette. “If we sell our shares then we lose our ability as shareowners to influence companies to act responsibly.”

[…]

The staff recommends that the CalPERS board take no official position on the de León bill. CalPERS’ investment committee will take up the legislation next Monday.

The CalSTRS governing board voted last week to take no position on the legislation.

The legislation that spurred the report, SB-185, can be read here.

Photo by  rocor via Flickr CC License