King Coal is long deposed, and the state of California is taking steps to make sure than none if its investment dollars are used to support the “dirty” energy industry. Related to this, the California Assembly passed legislation on Wednesday that requires the state’s public employee pension funds to divest from coal companies.
The Assembly voted of 43 to 27 in favor of the bill, which requires the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS) (which together represent $476 billion in assets) to sell all holdings in businesses that earn at least half of their revenue from coal mining. The divestment must be finalized by July 2017.
California Governor Jerry Brown is expected to sign the bill. When signed, the new law will be the first to ban a state pension fund from investing in the coal industry.
Statements from California legislators
“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. “I’m pleased that my colleagues agree: it’s time to move on from this dirty energy source.”
California Senate President Pro Tem Kevin de León was also complimentary of the bill.
“Coal is losing value quickly and investing in coal is a losing proposition for our retirees; it’s a nuisance to public health; and it’s inconsistent with our values as a state on the forefront of efforts to address global climate change,” de León commented. “California’s utilities are phasing out coal, and it’s time our pension funds did the same.”
More on California divesting from coal
Now the bill must be approved by Governor Brown before it can become law. Given that the governor has been speaking up about the importance of taking steps to ameliorate climate change, it is extremely likely he will sign the divestment bill.
The new divestment bill becoming law will make California the latest state to move forward with divesting from fossil fuels as an key part of acting to stop climate change. The fossil fuel divestment movement has been lobbying cities, states, universities and companies to sell their holdings of coal and other fossil fuel firms for more than 10 years now. According to 350.org’s divestment project, as of September the 1st, almost 400 organizations have agreed to some form of fossil fuel divestment.
Of interest, Norway’s sovereign wealth fund was also recently instructed to divest from coal by the Norwegian parliament.