Fossil fuel investments responsible for losses of $5B in CA public pension funds

Source: By David R. Baker, San Francisco Chronicle • Posted: Monday, August 17, 2015

California’s public pension funds, CalPERS and the California State Teachers’ Retirement System, have lost more than $5 billion from their investments in fossil fuels from June 2014 to June 2015.

Many fossil fuel stocks have continued to plunge as oil and coal prices drop, according to an analysis from environmental group The report comes as some push forward legislation that would make the funds divest from coal companies.

“It’s important to see that fossil fuels in general, and coal in particular, are risky bets for the pension system,” said Brett Fleishman, a senior analyst with, which promotes fossil fuel divestment as a way to fight climate change. “When folks are saying divestment is risky, we can say, ‘Well, not divesting is risky.'”

A bill proposed by state Senate President Pro Tem Kevin De León (D) of Los Angeles, S.B. 185, would make both funds dump their stocks in companies that obtain at least half of their revenue from mining coal for power plants.

Coal companies accounted for $875 million of the funds’ losses in the last year.

CalPERS invests in about 30 coal companies that would be affected by the bill, representing a combined market value of $167 million. The teachers’ fund holds about $40 million in coal investments covered by the bill.

“This bill is the right thing to do both from the economic and social perspective,” said state Sen. Jerry Hill (D) of San Mateo, who co-authored the legislation. “We should be moving to sources of energy, and investments, that are socially responsible and will take us from the 20th century into the 21st.”

CalPERS earned a 2.4 percent return in the fiscal year that ended June 30 despite the fossil fuel losses (David R. Baker, San Francisco Chronicle, Aug. 13). — CVK