A new report has found that California’s two public pension funds lost over $5 billion over the last year due to investments in the top 200 fossil fuel companies.
The report was published by Trillium Asset Management, “the oldest independent investment advisor devoted exclusively to sustainable and responsible investing,” and highlights the fact that California’s two public pension funds, California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS), suffered a loss of over $5 billion over the last financial year due to investments in the world’s 200 largest oil, gas, and coal companies (by carbon reserves).
Interestingly, this report comes at the same time that S.B. 185 is awaiting vote in the California State Assembly, a bill that would divest CalPERS and CalSTRS from coal.
“These freshly incurred losses starkly demonstrate coal’s financial risk, and illustrate the potential benefits of SB 185 to California pensioners.” said Will Lana, Partner at Trillium Asset Management.
The report reviewed publicly disclosed material, and included the finding that CalPERS and CalSTRS lost a combined $840 million from stock investments in the world’s largest coal companies. In fact, the authors of the report note that “the review indicates a 25% decline in the pension’s coal stocks” over the past financial year.
Conversely, “most other stock investments held by CalPERS and CalSTRS rose” over the same period.
“This is a material loss of money, which directly impacts the strength of the pension fund,” said Matthew Patsky, CEO of Trillium Asset Management. “Fossil fuel stocks are volatile investments. Investors and fiduciaries should take this moment to reassess their financial involvement in carbon pollution, climate disruption and the financial risk fossil fuels plays in their portfolio.”
Specifically, in recent months both funds have suffered heavily from individual investments.
The report itself notes that BHP Billiton looks to have cost the two funds the largest dollar declines. At the same time, Bloomberg noted earlier this month that CalPERS original $91.8 million share in the Pioneer Natural Resources Co. as of June 2014 has since lost approximately $40 million in market value due to the company’s massive drop in price — from $33 billion to only $19 billion.
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