May 27, 2023
On Thursday, the California Senate passed a bill to divest the country’s two largest public pensions from fossil fuels, with momentous support. The bill will now move to the Assembly, and could take effect by January 2024.
Currently, the two impacted funds — the California Public Employees Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) — collectively hold over $44 billion in fossil fuels. That means billions in state employees’ retirement dollars are tied to the success of projects that are causing global fatalities and climate catastrophe. The bill would require the funds to divest from all existing fossil fuel investments by 2030.
The bill, authored by Sen. Lena Gonzalez (D), has support from over 140 organizations including unions representing 470,000 members, although it’s also faced hesitance and pushback from some legislators, pension fund leaders, and union members. Divestment is a growing trend: Pension funds in New York City, Chicago, Washington, D.C., and elsewhere internationally have already done some level of divestment. On the brink of becoming the world’s fourth-largest economy, California’s financial decisions have global impact.
Supporters of the bill cite the nearly $30 billion in climate damages that California has faced in 2023 alone, plus the growing severity of droughts and wildfire, as reasons to divest, and suggest that this strategy could actually be more profitable for the pension.
The California legislature seems serious about climate action. Another newly proposed bill in California could be the first legislation in the nation to make oil and gas companies pay direct compensation for harm to human health. Owners of oil or gas production facilities would be legally liable for health outcomes like respiratory disease in children and elders, preterm birth or high risk pregnancies, and certain cancer diagnoses, and would have to pay victims up to $1 million in penalties.
The Lever (editor@levernews.com)
