Divesting Pension Funds from Fossil Fuels

December 8, 2021

ClimatesafePensions.org:

A first-of-its-kind report released today from Climate Safe Pensions Network and Stand.earth reveals that just 14 pension and permanent funds finance fossil fuels to the tune of $81.6 billion.

The report shows a comprehensive accounting of the fossil fuel exposure of 14 pension funds in one report from Climate Safe Pensions Network and Stand.earth reveals that just 14 U.S. public pension funds are the quiet culprits of climate chaos: with $81.6 billion invested in coal, oil, and gas.

With over $46 trillion in assets worldwide, pension funds are among the largest institutional investors in fossil fuels. These investments have dangerously underperformed the rest of the market, making public pensions’ fossil fuels investments inherently risky.

Pension funds’ financial influence make them a force to reckon with in the battle to confront, slow and mitigate climate change. Pension fund decision-makers must take climate protection seriously — not only for their financial well-being, but also for the well-being of their millions members.

With 10 years of data, there’s hard evidence that divestment is a winning financial strategy. The fastest way for pensions to address climate change is to divest fossil fuel holdings and invest in just and equitable climate solutions.

Download Report.

Bloomberg:

California’s climate-conscious policies aren’t matched by the investment choices of its largest public pension funds, according to a report from two environmental groups. 

Of the 14 top U.S. pension funds analysed by Stand.earth and Climate Safe Pensions Network, California Public Employees’ Retirement System and California State Teachers’ Retirement System stood out as the largest investors in fossil fuel companies, with $27.1 billion and $15.7 billion, respectively, according to findings published Wednesday.

The two combined hold about half the fossil fuel assets for the entire group, according to the study. Calpers also came first in fossil fuel holdings as a proportion of its total assets under management, at 6.9%.  

“It reveals to me that despite their rhetoric of being very active on climate issues, the proof is in their investment portfolio and what it looks like,” Richard Brooks, climate finance director at Stand.earth, said by email.  “It looks to me like they are amongst the biggest laggards.”

Calpers has argued in the past in favor of engagement with carbon emitters rather than divestment in order to drive companies to improve, and the fund is a founding member of Climate Action 100+, which presses the world’s biggest greenhouse-gas emitters to take action. 

One Response to “Divesting Pension Funds from Fossil Fuels”

  1. rhymeswithgoalie Says:

    Last year’s CalPERS response to the complaint that they still had holdings in coal:
    https://www.calpers.ca.gov/page/newsroom/for-the-record/2020/calpers-responds-to-fossil-free-california-report

    The defense, of course, is all the money being made from investing in meth labs and land mines coal. An excerpt:

    After reviewing the report, we find both the content and conclusions misleading. This is disappointing given the amount of public information available which sets out CalPERS’ strategy on climate change in detail within our fiduciary duty to achieve the 7% rate of return. These investment returns pay nearly 60 cents on the dollar for our members’ retirement benefits.


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