In a state whose leaders speak urgently about fighting climate change, it is shameful and hypocritical that CalPERS and CalSTRS have billions of dollars of public employee retirement money invested in planet-destroying fossil fuel companies, including Exxon Mobil, Chevron and Shell.
Lawmakers were considering changing that by forcing the country's two largest public pension funds to sell their stakes in big oil, gas and coal companies by 2031. Legislation to do so passed the state Senate last month. But days before a key hearing at the Public Employment and Retirement Committee this week, its chair, Tina McKinnor (D-Inglewood), presented the author with a long list of non-negotiable amendments.
The demands contained in the 39-page analysis read like a wish list written by opponents of the bill, including the oil industry and pension fund boards. Instead of accepting the changes, the bill's author, Lena González (D-Long Beach), withdrew the measure and says she will try again in the future. It was an understandable measure.
The amendments would dramatically reduce the number of companies and types of investments that pension boards would have to divest. They would push back the divestment deadline to 2045, delay transparency reporting requirements by 20 years, and allow funds to continue making new investments in fossil fuels until then.
They would allow them to maintain investments in fossil fuels even beyond 2045, the year California pledged to achieve net-zero carbon emissions, if pension boards determine that companies have made “measurable progress” in the transition from oil. and gas. And most strangely, the amendments would remove from the legislation the term “fossil fuel company,” which the committee's analysis described as a “socio-environmental construct that is historically used to vilify oil companies and their products,” and they would replace it with “energy company” instead.
McKinnor, who blocked the same legislation last year, said in an interview Thursday that he did not meet or negotiate with oil companies about the bill. He said his amendments were intended to be a compromise to benefit public employees and their retirement dollars, developed after meeting with representatives of some of the state's largest public employee unions who have remained neutral on the bill. law.
McKinnor was not actually offering a compromise, but rather a poison pill so unreasonable and riddled with loopholes, exceptions and delays that it would be inaccurate to call it fossil fuel divestment.
That should not deter those who support divestment, including educators, state workers, and young activists and environmentalists who held a rally on Wednesday and promised not to back down in the fight.
They have strong financial arguments on their side, including the experience of other large institutional investors, such as New York City's public pension funds and the University of California, which have already concluded that fossil fuel investments are too volatile and that their portfolios will perform as well or better without them.
California leaders must demonstrate that they are more than just talk when it comes to climate change and begin divesting from dirty and dangerous investments in fossil fuels. It's a smart move not only because these holdings are financially risky in a world that is shifting toward renewable energy, but also for moral reasons. It is wrong to use the retirement money of teachers, firefighters and state workers to support a deceptive industry that profits from environmental destruction and human suffering. That's why CalPERS got rid of tobacco producers, weapons manufacturers and thermal coal companies years ago.
If committee leadership does not give a fair shake to actual fossil fuel divestment legislation in the future, Assembly Speaker Robert Rivas (D-Hollister) should step in and ensure the proposal advances to a vote in the full.
California cannot be a climate leader if it continues to prop up harmful and reckless fossil fuel companies whose pollution threatens to send future generations to an uninhabitable planet. To end their stranglehold on the public, we have to let them go.
