California continues to be a climate and cleantech leader. One of its big recent announcements in this regard is that state policymakers have introduced the California Fossil Fuel Divestment Act (SB 252).
Naturally, this divestment move was stimulated by young adults, students. It was then introduced by Senator Scott Wiener (D-San Francisco), Senator Lena Gonzalez (D-Long Beach), and Senator Henry Stern (D-Los Angeles) in the California Senate. The package actually covers a range of topics. It is “a suite of bills that work together to improve transparency, standardize disclosures, align public investments with climate goals, and raise the bar on corporate action to address the climate crisis.”
One of the shocking stats that the parties use to emphasize the importance of this matter and the stunning reality of human-induced global heating is that 71% of greenhouse gas emissions to date have come from just 100 companies. “Without corporate action to reduce these emissions, California would be unable to meet its climate goals,” the state senators surmise. “At a time when rising anti-science sentiment is driving strong pushback against responsible business practices like risk disclosure and ESG investing, these bills leverage the power of California’s market to continue the state’s long tradition of setting the gold standard on environmental protection for the nation and the world.”
Tracking Carbon Emissions Better
The good news as far as tracking carbon emissions and gradually working to reduce them is that 81% of S&P 500 companies were already reporting direct emissions (also known as scope 1 and scope 2 emissions) in CSR (corporate social responsibility) reports. The new climate package would require 100% of large corporations to report their carbon emissions, using the “gold standard” Greenhouse Gas Protocol. And that would even include scope 3 emissions. “These disclosures will include corporate supply chains (scope 3), which can include in excess of 90% of a corporations carbon emissions,” Senator Scott Wiener’s office writes.
Divesting from Fossil Fuels
What will it take to actually cut emissions, though? One thing it will take is removing investment money from fossil fuel companies and projects. The organization Fossil Free California (via Climate Safe Pensions) is a bit more direct about how the climate package helps in this regard. “Today amidst devastating flooding, an historic mega-drought, wildfires, and fossil-fueled public health crises, students, retirees, and California communities across the state celebrate as Senator Lena Gonzalez, joined by Sen. Scott Wiener, and Sen. Henry Stern announced that they will introduce new Senate legislation, the California Fossil Fuel Divestment Act (SB252), which will divest the state’s public pension funds — CalSTRS and CalPERS — from fossil fuels,” they state.
And how much weight do CalSTRS and CalPERS have to toss around and influence things?
“The California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) are the two largest public pension funds in the United States have an investing power of $442 billion and $302 billion, with an estimated $9 billion invested in fossil fuel companies. This legislation will end the contradictory and incongruous policies that place the state of California as a leader in the fight against climate change, even while the state is continuing to channel billions directly in the fossil fuel companies that are causing climate change.” Now, $9 billion is not going to shift the market alone, but it’s a start, and it’s not $9 million. It’s also a push and an inspiration to others to move into the future.
Furthermore, it should not be forgotten or underplayed that this protects the investments of those California employees reliant on smart investment — and their homes and lives. “If passed, this critical bill would protect the retirement savings of California’s teachers, firefighters, and state workers from being used to finance oil, gas, and coal — the very drivers of the climate chaos upending Californians’ lives,” Fossil Free California writes. “Californians are being pummeled by season after season of fossil-fueled extreme weather, from the firestorm in Paradise to the destructive floods of January 2023 that swept away structures from Watsonville to San Francisco, causing over $1 billion in damages. It’s well past time to divest California’s public pension funds.”
A Decade of Effort & Thousands of Voices
As with all big moves in politics, this one was a long time in the making that relied on generations of active citizens. Fossil Free California informs us: “California students, youth, frontline communities, and pension members have campaigned for CalPERS and CalSTRS to divest for nearly a decade. Since a similar bill was introduced in 2022 with the support of 143 unions, coalitions, and organizations, Californians have made thousands of calls, written nearly 20,000 letters, and organized dozens of meetings with legislators to advocate for the divestment of California’s public pension funds.
“An estimated 1,550 institutions representing over $40 trillion in assets have already committed to fossil fuel divestment, including the University of California (UC) System, California State University System (CSU), California Academy of Sciences, the Episcopal Diocese of California, the State and City of New York, the State of Maine, and the Quebec pension plan divested from oil production. If passed, California would be the third state to divest from fossil fuels, following Maine and New York.”
So, indeed, even as a climate leader in this regard, California wouldn’t be first. Its great eastern US rival New York is even ahead of California on this one. Perhaps it’s time to catch up? And with the various components of the package, it appears that it does go even further.
I’ll let Senator Scott Wiener have the final word. “It raises the bar for pro-climate investment, setting a standard that could influence how trillions more dollars in investments are apportioned. SB 252 ends California’s contradictory and incongruous policy of being a leader in the fight against climate change, while simultaneously investing billions of dollars of teacher and state-employee retirement funds directly into the fossil fuel corporations that are the leading cause of climate change.” What more needs to be said than that? Get it done, California!
Featured image courtesy of CJ Koepp, Fossil Free California
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