A new bill that was approved by the California state Senate on Thursday would require two of the country's largest pension fund to pull $15 billion in investments from oil and gas companies.
The measure passed the California Senate with a vote of 23-10, according to Bloomberg, and would require the California Public Employees' Retirement System (CalPERS) and the California State Teachers Retirement System to stop any new oil and gas investments by 2024, and completely divest from large oil and gas company stocks by 2031.
The Senate passed a similar bill a year ago, but it died in Assembly. This year's crack at divesting the pension funds from oil and gas will now head to the Assembly, where it may share a similar fate.
The Senate bill did not earn the backing of CalPERS.
Senate Bill 252 would do nothing to combat the dangers of climate change," CalPERS Chief Executive Officer Marcie Frost said. "Its only impact, at least in the short term, would be to make it that much harder to achieve the investment returns needed to pay the benefits promised to Calpers members."
CalPERS argument is that it uses its investment clout to force climate change issues at the companies it invests in.
One of the authors of the bill, Senator Lorena Gonzalez, argues that CalPERS has had decades to push for change with little success. "Clearly their strategy isn't working," she said.
The two funds, CalPERS and CalSTRS are massive, managing more than $820 billion in assets, and seek a return rate of 6.8%.
Backers of the bill argue that the two massive funds' investments into oil and gas are in direct conflict with California's net-zero by 2045 goals.
By Julianne Geiger for Oilprice.com
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