LOW IMPACT: CA Gov Forces CalSTRS and CalPERS to Drop Coal
On October 8th, 2015, California Governor Jerry Brown signed into law State Bill 185. This bill requires the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) to divest from thermal coal companies by July 1, 2017.
The bill was authored by California State Senator Kevin De León. Both pension giants in investment committee meetings did not take official positions on the legislation when it was being debated. Before the law was moved forward, CalPERS at first pushed back. CalPERS has a long history and preference of engaging corporate boards to fight for change in practices, before divesting from a company. In many circumstances in recent history, California state lawmakers prefer divestment – whether its coal, Iran-sanctions, or munitions. The State of California has decided to take an avoidance strategy of coal companies versus what many European asset owners prefer to engage these companies in practices (through board votes).
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