As the World Burns or Drowns, CalSTRS Won’t Divest from Fossil Fuels

by Carla

This year as we watched the Amazon, the “lungs of the earth”, burn, and as we witnessed more and greater climate catastrophes around the world, as the temperature increases result in ice melts and rising oceans and torrential storms that disproportionately affect peoples and nations which have not caused the problems they face, it would seem that a policy of divesting from the fossil fuels that cause climate change would be a reasonable course of action.  Yet, the California State Teachers Retirement System (CalSTRS) and the California Public Employee Retirement System (CalPERS) still refuse to seriously consider the demands to divest from their current holdings in fossil fuels, and to work on a model of sustainable investing.

Adults working along with Fossil Free California, in conjunction with youth groups such as Youth vs. the Apocalypse, Earth Guardians and Warriors 4 Justice, have been trying to educate the CalSTRS (State Teachers Retirement System) Board about the need to divest immediately from fossil fuels.

In September 2019 students from youth groups traveled to Sacramento to make their third appeal to the STRS board to divest from fossil fuels.  The board unflinchingly dismissed their demands to simply investigate the possibility of divestment. The middle school students, who came from Oakland schools, had researched and prepared a script which they passed from one person to the next since they were limited to a minute per speaker.  After speaking, students brought up to the dais a stuffed animal, each representing an endangered species, and left them for everyone to view.  They were admonished by the Investment Committee’s board chair, Harry Keily, to not approach the board due to security concerns. 

Students, both middle school and university students, presented at the STRS board again in November, 2019.  Students disrupted the CalSTRS meeting, playing Greta Thunberg’s speech and unfurling banners.  One student did a performance dance to the speech, and was about to be forced out.  After a 2 hour postponement of the meeting, the meeting continued where students and teachers were allowed to address the board for one hour.

photo of demonstrators

The STRS board argues that it has to make decisions based on fiduciary concerns, representing all of California’s public school teachers.  The board claims that it would be irresponsible to even consider divestment at this point in time, and uses the argument that if STRS continues its investments in fossil fuels, STRS also has the ability to influence policy.  As of December, 2019 we have not seen any changes in the policies of the large fossil fuel companies that will have any impact on the pressing problems created by climate change. 

In January, the CalSTRS Investment Committee presented a report, in accordance with SB 964 (2018) which requires that CalSTRS and CalPERS report on the financial risk associated with their investment portfolios in climate related investments.  The report does not acknowledge the extreme danger that is faced as the world approaches the 2º C maximum temperature increases.  It does not acknowledge the crisis that we currently face.  On the other side, California State Treasurer Fiona Ma, an ex-officio member of the investment committee, supports the divestment of CalSTRS from its fossil fuel funds.

CalSTRS is the second largest public pension plan in the country.   In September, shortly after the students addressed the STRS board, the University of California announced that it would be divesting both its endowment and pension funds from fossil fuel companies, including stocks and bonds. 

After a six year fight by UC Fossil Free the University of California system agreed to divest.  The argument the UC chancellors cited was that the investments in fossil fuels are fiscally unsound and represent a non-sustainable model of investment.  According to articles in the Nation magazine (Oct. 8, 2019, Williams, Emily and LeQuesne, Theo) the UC Board of Regents knew as early as 2013 that “fossil free funds have been outperforming” fossil fuel funds.  The activists at UC understand that divestment is the strongest way to put pressure on fossil fuel companies and to fight against the racist and classist impacts of fossil fuel companies’ policies.  The University of California’s (UC) announcement “declaring a climate emergency” came after the Climate Strikes around the world led by youth.  A political movement created the conditions for the response from Bachner (UC’s chief investment officer and treasurer) that UC needed to look at a new model for investment that is founded upon environmental sustainability, social responsibility and a fiduciary responsibility.  After years of activism, UC acknowledged that it can earn more money for its endowment and pension fund by supporting a sustainable economic model.

Similarly, New York City was pressured to divest its pension funds from fossil fuels in 2018. New York City has the fourth largest public pension fund in the country.   DIVEST NY, a coalition of local climate change organizations and public unions, led the fight for divestment that started in 2012 after Hurricane Sandy.  Labor played a large role in organizing for divestment under the name Labor 4 Sustainability.  The comptroller of New York City, Stringer, speaks about the fact that divestment from fossil fuel funds is not only ethical, but also fiscally sound.   Even the governor of New York, Cuomo, has come out in support of divestment of public funds from fossil fuel companies.  

Recent studies (done by Corporate Knights, a media and analysis firm) show that funds in the fossil fuel sector are actually underperforming, and therefore, a bad investment for the future of the retirees. Corporate Knights claims that if CalSTRS had divested from fossil fuels 10 years ago, the retirement fund would have gained $5.5 billion dollars.

Those people who have addressed the STRS board by speaking at meetings or sending emails have made clear that due to the climate disaster we don’t have the luxury of waiting to see if we can influence the policies of the fossil fuel industries and the banks that fund them.   Therefore, Fossil Free California is urging an immediate divestment of public pension funds from fossil fuel industries, and a reinvestment of these monies into clean energy, supporting a green new deal. The CalSTRS Investment Committee does not believe that divestment has the support of its stakeholders, public school educators and retired educators.  Fossil Free California, in response to the CalSTRS report that they will not be changing their investment model, is calling on educators, students and community members to address the investment committee’s board meeting on January 30, and to commit to on-going pressure on CalSTRS to create a sustainable investment model.   Information can be obtained at the Fossil Free website (https://fossilfreeca.org/).  The website also contains links to send emails to the CalSTRS and CalPERS board.  Both CalSTRS and CalPERS need to feel pressure from their stakeholders that they no longer will tolerate the intransigence of the Investment Committees in the face of growing dissent and mounting evidence against their views.

Author: lagai

LAGAI-Queer Insurrection is one of the oldest radical queer liberation groups in the U.S. We publish UltraViolet, a more or less bimonthly newspaper, which is mailed free of charge to over 1500 people, including over 800 prisoners. Our website is www.lagai.org.

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