CalSTRS’ investment staff will study the prospect of divesting from all thermal coal companies in the fund’s portfolio, according to a report from Pensions & Investments.
The pension fund’s investment committee approved the study, which reportedly will last between four and eight months, on Friday.
Divesting from coal is currently a hypothetical for CalSTRS, but it may not stay that way forever; Pension360 has covered the bill in the California legislature that would force CalPERS and CalSTRS to divest from coal.
More on the study from Pensions & Investments:
Chief Investment Officer Christopher Ailman made it clear that he is against divestment of securities in general, saying the fund doesn’t have a seat at the table when it divests. “The effects of divestment silence us,” he said.
Mr. Ailman told the investment committee that he wasn’t taking a specific position on the coal divestment. He said CalSTRS has previously enacted divestment strategies five times in dealing with investments in South Africa, Iran, Sudan, tobacco and firearms. Each time has resulted in investment losses, he added. The staff study will look at how risky it is for CalSTRS to continue investing in coal companies.
CalSTRS has about $40 million invested in 12 coal-company stocks. The resolution would affect only thermal coal companies; thermal coal is used for energy production.
CalSTRS manages approximately $190 billion in pension assets.
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