CalPERS to Set Talks With Thermal Coal Companies

The California Public Employees’ Retirement System (CalPERS) announced that it will begin to engage thermal coal companies in its investment portfolio on climate change risks as a first step required by Senate Bill 185, authored by Senator Kevin de Leon, and signed by Governor Brown today.

"Climate change represents risks and opportunities for a long-term investor like CalPERS," said Anne Stausboll, Chief Executive Officer for the Pension Fund and co-chair of the Ceres Board, the nation’s largest coalition of investors, environmental groups, and nonprofit organizations advocating for sustainable business practices. "We have a fiduciary duty to protect the Pension Fund and mitigate the effects of climate change on our investments. CalPERS has a long history of constructively engaging companies to advance sustainable business practices."

"We applaud Senator de Leon and Governor Brown for their commitment and attention to this important issue," added Stausboll. "CalPERS has been at the forefront of tackling climate change issues through policy advocacy, engagement with portfolio companies, and investing in climate change solutions. We remain committed to encouraging our investment managers, portfolio companies, and policy makers to engage in responsible environmental practices as part of our duty as a principled and effective investor."

CalPERS will take immediate steps to engage thermal coal companies as defined by the legislation. As of June 30, 2015, CalPERS invests in approximately 27 thermal coal companies with a portfolio value of about $57 million. Following its engagement with the companies, CalPERS will evaluate divestment as outlined in the bill.

CalPERS is a founding member of the Investor Network on Climate Change, a leading network of 100 U.S. institutional investors representing more than $10 trillion, and addressing a policy agenda that calls on governments and regulators to introduce carbon pricing and disclosure. The Pension Fund is also a founding signatory of the United Nations-supported Principles for Responsible Investing (PRI) and helped craft its six tenets that serve as a guide for investors to better understand the implications of sustainability and how to incorporate these issues into their investment decision making and ownership practices.

In September 2014, CalPERS signed the Montreal Carbon Pledge, which commits asset owners and investment managers to measuring and publicly disclosing the carbon footprint of their investment portfolios on an annual basis.