7/14 Through 6/15 - CALPERS & CSTRS Pension Funds Lost $5 Billion From Fossil Fuel Investments

[hatrack]

California’s public pension funds lost $5 billion last year through declines in their fossil fuel investments, according to a new report from Trillium Asset Management. The losses for CalPERS and the California State Teachers’ Retirement System were largely due to the price of coal and oil falling between July 2014 and June 2015, the group found. The report comes amid increasing calls — and proposed legislation — for fossil fuel divestment.

“It’s important to see that fossil fuels in general, and coal in particular, are risky bets for the pension system,” Brett Fleishman, a senior analyst with 350.org, which advocates for divestment, said in a statement. “When folks are saying divestment is risky, we can say, ‘Well, not divesting is risky.'”

California State Senate President Pro Tem Kevin De León (D) introduced a bill earlier this year as part of the Senate’s “climate package” that would require both funds to divest from companies that derive at least half their revenue from coal mining. The package passed the state Senate in the spring, and de León’s bill, S.B. 185, is expected to be considered by the Assembly later this month. The two funds represent pensions for nearly 2.6 million Californians.

Trillium’s analysis found that the coal stocks in the funds declined 25 percent during the 12-month period. “These freshly incurred losses starkly demonstrate coal’s financial risk, and illustrate the potential benefits of S.B. 185 to California pensioners,” Will Lana, a partner at Trillium, said in a statement. Trillium is an employee-owned investment management fund with an emphasis on sustainable and responsible investing.

EDIT

http://thinkprogress.org/climate/2015/08/17/3692190/california-pension-plans-fossil-fuel-losses/

[djean111]

1. I am really surprised that divestment from fossil fuel investments has not already started.

Then again, I have seen someone give the argument that switching to solar from nuclear and fossil fuels puts retirement pensions at risk. I can understand the Koch types wanting to throttle solar and wind because they make fortunes from fossil fuels. But - isn't recognizing future market trends the job of those who are PAID to manage those retirement funds? Or is squeezing the last drop of profit from nuclear and fossil fuels more important than the retirement funds.

[Finishline42]

2. They stay in Oil companies because of high dividend rates

And the major oil companies will probably be back up in a couple of years. And it's not really a loss until you sell the stock.

But coal is a loser. The killer was the breach of the coal ash containment pond in East Tennessee. Cost over a $1billion to clean up. Put a cost on insurance for the other 400 ponds throughout the country.

One way for the Teachers Pension Fund to capitalize on solar would be to fund PPA's for schools. It would lock in what schools pay for the cost of electricity for 20 years and also pay the pension fund a constant return. Win-Win.

NYC Mayor de Blasio said that NYC pays around $600 million/yr for electricity. Doesn't this scream start installing solar on government buildings? Not overnight, but in a consistent 10 or 20 yr plan. That way you take advantage of improvements and innovation along the way. It would also reduce the cost of government.

[djean111]

3. What is sad, is that what you suggest seems so logical and so right, like you say - win-win,

but instant profits rule.