CalPERS board’s divestment dilemmas

4 responses to “CalPERS board’s divestment dilemmas”

1. 

   r.bauer@maastrichtuniversity.nl

   January 24, 2020

   Excellent remark by JM@corpgov.net and probably related to the question: “what is the best (financial) interest for pension participants?”. Have a look at Dutch pension funds’ effort to truly understand the preferences of their participants rather than politicising the debate here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3287430 Another great remark by Vanessa: it may be very well that NOT investing in Fossil Fuel companies is a better long-term investment decision. Since we leave the responsibility to the fiduciaries they have the obligation to update their views with recent academic evidence and they also will have to objectively (i.e. no politics please) assess the probability of achieving decent returns with for instance oil companies in a world in which the global community in the broadest sense will press more and more for innovations in renewable energy.

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2. 

   vanessa@horseopera.org

   January 16, 2020

   The last line of this article — “new divestment around fossil fuels won’t happen anytime soon” — ignores some important information: namely, that fossil fuel divestment will SAVE the fund money, and strengthen the portfolio. At the November 2019 Board meeting, CalPERS board members were presented with the findings of a study that showed the fund would be $11.9B richer had it divested from fossil fuels 10 years ago. This rigorous study, conducted by Corporate Knights, found similar losses from CalSTRS and CoPERA’s fossil fuel investments. In fact, across the board, fossil-free funds are outperforming their oily counterparts — and will continue to do so as the world rapidly decarbonizes. BlackRock’s announcement yesterday further reinforces this trend. Rather than embracing a false dichotomy of morality vs. profit, CalPERS board members need to understand that their fiduciary duty requires them to divest our public employees’ hard-earned dollars from this dying industry NOW. The co-benefit, of course, is moving a giant lever of capital to address the looming climate crisis. But even in the short-term, protecting the future of human civilization is also a smart financial move.

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3. 

   jm@corpgov.net

   January 15, 2020

   How about at least surveying CalPERS members on these issues? I’m not saying members should be able to override the legislature but they should have some more direct avenue of input to CalPERS directors like Mr. Perez outside the election cycle. CalPERS has a website that can be used to interact with its members. They should take advantage of it.

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4. 

   jason.perez@ci.corona.ca.us

   January 15, 2020

   In my personal opinion, the need to revisit our divestments has to do with Fiduciary Duty. The current CalPERS Board members must re-evaluate the divestitures to determine if they are prudent, even if they were not on the Board at the time the decision was made.

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