California Assembly Votes to Divest Public Pension Funds From Coal

With a vote of 43 for and 27 against, the California State Assembly voted to divest the state’s public pension funds, CalPERS and CalSTRS, from thermal coal. Now that it’s passed both houses of the state legislature, S.B. 185 will head to the desk of Governor Jerry Brown for his signature or veto. If signed into law, S.B. 185 would make the two massive and influential institutions the first statewide public pension funds in the nation to divest from any fossil fuels.

“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,” said Senate President pro Tempore Kevin de León. “California’s utilities are phasing out coal, and it’s time our pension funds did the same.”

The fossil fuel divestment is challenging institutions, individuals, and governments to show climate leadership and align their investments with their values by divesting from fossil fuels ahead of December’s climate talks in Paris.

“This is a big moment for California, and for everyone around the world standing up to the most powerful and destructive industry in history,” said May Boeve, Executive Director of 350.org. “Today’s vote is so meaningful because it sends a strong message: political leadership on climate change means being willing to stand up to powerful moneyed interests, and call out the destructive practices of the companies causing the climate crisis. Even in California, there’s still more to do -- like divesting public pension funds from oil and gas, and banning extreme energy extraction techniques like fracking -- but this is a big step that adds major momentum to our campaign. Leaders in New York, Massachusetts, and around the country would be wise to take note and follow suit.”

This vote comes shortly after a report from Trillium Asset Management revealed that, combined, CalPERS and CalSTRS incurred over $5 billion in losses from their holdings in fossil fuel companies in the last year alone, strengthening the case for turning away from all fossil fuels.

"I wrote the first-in-the-nation resolution calling for fossil fuel divestment, which passed my Ventura County Democratic Party back in 2013, and was ultimately passed by the California Democratic Party this spring," said RL Miller, cofounder of Climate Hawks Vote and Chair of the California Democratic Party's environmental caucus. "Though S.B. 185 is narrower, as it only calls for coal divestment, the work within the state’s Democratic Party has enlightened a lot of activists to the need for full fossil fuel divestment, and S.B. 185 is the right bill at the right time. Once passed, I expect the bill to unleash a flood of actions in other states with similar bills."

S.B. 185, introduced by Senator de León, is one of eleven bills included in the California Climate Leadership Package. Other noteworthy bills include S.B. 350, and S.B. 32, which call for significant reductions in fossil fuel use and emissions, as well as an increase in the use of renewables to generate electricity and energy efficiency.  

“Addressing the climate crisis is a moral imperative,” said Jim Miller, member of the American Federation of Teachers, Local 1931 VP/Chair SD-Imperial Counties Labor Council Environmental Caucus. “Although much more still needs to be done, S.B. 185 and the Climate Leadership Package are an important step in the right direction if we are serious about saving our children’s future.”

This announcement comes shortly after the Executive Director of the California Academy of Sciences, Jonathan Foley, issued a strong statement on the museum’s extensive efforts to disentangle themselves from the fossil fuel industry. His statement was a direct response to a new campaign launched by The Natural History Museum and 350.org calling on the country’s top science and natural history museums to cut ties with the fossil fuel industry.

The campaign for S.B. 185 is part of a growing worldwide push to divest the financial holdings of universities, religious institutions, municipalities, pension funds, and other investors from fossil fuel companies. For more information on S.B. 185, visit: http://focus.senate.ca.gov/climate.