California fossil fuel divestment bill passes Senate with massive momentum
May 25, 2023
Indigenous lands of the Nisenan and Miwok Peoples (colonially called Sacramento, California) – Today, SB 252 – a widely-supported bill for the two biggest public pensions in the U.S., CalPERS and CalSTRS – to phase out fossil fuel investments – passed the California state Senate full floor vote with an outsized majority of 22 to 10 (final count pending absentees). CalPERS and CalSTRS collectively represent $750.5 billion in assets, and together hold over $44 billion in fossil fuels.
“It’s not if CalPERS and CalSTRS divest from fossil fuels – it’s when and how fast. With Californians experiencing climate whiplash from deadly floods to intensifying fires, the brunt of this climate chaos is falling on those who have done the least to cause the crisis,” said Miriam Eide, Fossil Free California. “Massive gratitude to the students, teachers, union members, pensioners, and legislators for moving SB 252 through the Senate, and protecting our communities, pensions, and climate. California Assembly here we come!”
California, the world’s fourth largest economy, is poised to lead the financial sector into a new era of financial prudence and risk-managed growth by removing toxic and volatile fossil fuel holdings from CalPERS and CalSTRS.
SB 252 is widely supported, with over 140 California organizations endorsing, including unions representing over 470,000 members, and 4 Senate co-sponsors, with California State Treasurer Fiona Ma underscoring the bill allowing pensions “necessary time to prudently plan.” A unique coalition of students, retirees, teachers, union members and people from all over California have voiced their support, sending in over 1,300 letters to their senators, and for hearings, over 200 people joined in person or phoned in, while over 120 traveled to Sacramento to meet with legislators, as part of a Climate Accountability Lobby Day, in tandem support for SB 253 and SB 261.
Meanwhile, Californians are facing climate whiplash, attempting to navigate lives, jobs, and families, mopping up from record-breaking flooding (estimated at $30 billion in damages in 2023 so far) following decades of drought, and girding for the ever-lengthening wildfire season.
“For California’s teachers, workers, and retirees, climate chaos isn’t a someday problem, it’s a right-now crisis,” added Miguel Alatorre. “Californians are ready to move swiftly on SB 252, and lead the nation on fiduciary responsibility, pension stability and growth. Together we are building a fossil free world for students, workers, retirees, and communities where all of us can thrive.”
The IPCC urgently warns that “there is a rapidly closing window of opportunity to secure a liveable and sustainable future for all,” with UN Secretary General Antonio Guterres exclaiming “new funding for fossil fuel exploration and production infrastructure is delusional.”
With SB 252, California, the world’s fourth-largest economy is poised to lead the financial sector into a new era of financial prudence and risk-managed growth by divesting the funds of their toxic fossil fuel holdings.
“SB 252 passing the Senate today is monumental. It’s proof that it is possible for reform to occur despite the manipulations of the fossil fuel industry, despite those who push for the opposite and prioritize profits over lives,” said Anaya Sayal, 16, Youth vs. Apocalypse. “It brings us one step closer to living in a world where we don’t have to live in a constant state of apprehension regarding health conditions, and issues we face because of climate chaos; that future generations will also face as a result of the climate catastrophe. I would like to thank bill author Senator Lena Gonzalez, the bill’s co-authors for supporting this bill, and for all of the youth and adults who worked tirelessly with them to get the bill to the point it is at today. Your hard work does not go unnoticed!”
This comes as politically-motivated extremists work at the federal and state levels in attempts to ban common sense responsible and sustainable financial risk assessments, costing taxpayers millions.
Multiple studies reveal divestment leading to neutral or positive returns, removing volatile and risky assets from CalPERS and CalSTRS’s portfolios. If CalPERS and CalSTRS divested in 2009, the funds would have gained $17.4 billion by 2019, or $6,072 more per CalPERS member and $5,752 more per CalSTRS member. A June 2023 report from University of Waterloo is set to reveal updated data reflecting how much richer CalPERS and CalSTRS would have been.
“Even today fossil fuel companies are greenwashing rather than truly addressing climate change. And CalPERS unwittingly becomes party to that greenwashing, as when for example, it promoted to members Exxon’s bogus net zero by 2050 claims,” said Carlos Davidson, Faculty, San Francisco State University, CalSTRS member.
As Professor James Stone wrote, “Fossil fuels are a losing bet. Why are CalPERS & CalSTRS still investing in them?” To date, over 1,590 institutions representing more than $40.5 trillion in assets have committed to some level of fossil fuel divestment, including three New York City pension funds, the largest public pension in Washington, DC, the Chicago Public Teachers’ Pension Fund, and massive global pensions like ABP and PFZW.
Unions representing more than 470,000 California workers support SB 252. Union support includes California Faculty Association, CFT- Union of Educators & Classified Professionals, California Nurses Association, AFSCME California, Los Angeles College Faculty Guild, and California Community College Independents, and more.
SB 252 will now move to the Assembly, where it is expected to begin moving through Committees mid-June.
NOTES TO THE EDITOR:
Bill detail offered from the office of author Senator Lena Gonzalez: Senate Bill (SB) 252 will prohibit the California Public Employees Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) from making any new investments in the top 200 fossil fuel companies, and provide they divest any current holdings in these companies by 2031, with an additional 5-year off-ramp should the funds encounter specified market conditions.
LEGISLATORS WITH ‘YES’ VOTES, INCLUDE:
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