The bill now heads to Gov. Jerry Brown’s desk.
The website 350.org, a green group that has supported divestment efforts across the country, lays out the primary argument for divestment as: “If it is wrong to wreck the climate, then it is wrong to profit from that wreckage”.
The California Assembly in the USA has approved a new bill, SB 185 (De León), allowing the state pension funds, California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS), to divest their investments in coal firms. A spokesman for CalPERS stated the fund presently invests in between 20 and 30 of the kind of thermal coal mining corporations coated by Senate Invoice 185, with a cumulative worth of between $100 million and $200 million.
Republicans voted against the bill and several Democrats withheld their votes, with critics saying the measure would undermine the pension funds’ independence and reduce investment returns that pay retirees’ benefits.
CalSTRS has holdings of around $40 million, a spokesman said. CalPERS has about $292bn in assets and CalSTRS has $191bn in assets. The divestment movement has been pushing schools, cities, states, and companies to purge their holdings of coal and other fossil fuels.
California lawmakers passed a bill on Wednesday requiring the state’s two largest pension plans to divest their holdings in thermal coal as part of a push this legislative session to address climate change. “CalSTRS’ first priority is, and always has been, safeguarding the financial futures of our members and their families, and to make decisions exclusively in the interest of our members and their beneficiaries”.
New York and Massachusetts are in the early stages of considering similar bills, he said.
“Coal is the fuel of the past and it’s no longer a wise investment for our pensioners”, California assemblyman and bill sponsor Rob Bonta noted in a statement.
Thermal coal is used to produce electrical power throughout the United States, but in California, natural gas is more commonly used.
Another, SB 32, would build on California’s climate change law by locking the state into a goal of reducing its emissions 80 percent below 1990 levels by 2050. These bills have drawn a fierce campaign of opposition from the fossil fuel industry, and de León has accused the industry of “fear-mongering.”