Sit down for this man-bites-dog story: California’s government actually made a sensible decision last week.
The California Public Employees Retirement System (CalPERS), the largest public pension fund in the nation, rejected a proposal that it divest itself of stocks in fossil fuel companies because—yes, I can hardly believe it—it would harm the investment returns of the fund. Given than California’s unfunded liability for future public pensions is perhaps $800 billion or more (depending on which assumptions are used to make the forecast), California’s investment managers need to get every cent they can from their portfolio. So no moral grandstanding allowed.
ClimateWire reports the disappointing new for the the climatistas:
At a meeting in Sacramento, Calif., the investment committee and CalPERS officials listened to members of the public who favor divestment make their arguments.
Unswayed, committee members then voted to adopt the new rule, which is highly critical of divestment campaigns. The vote was unanimous, according to people present in the room when the vote took place. “Divesting appears to almost invariably harm investment performance,” the new policy reads, adding that evidence suggests divestment is an “ineffective strategy for achieving social or political goals.”
Citing legal obligations under the California Constitution to avoid financial risks and make as much money for clients as possible, CalPERS said it would work with companies it owns to achieve social goals. The policy, which goes into effect immediately, “generally prohibits Divesting in response to Divestment Initiatives, but permits CalPERS to use constructive engagement.”
The vote at the country’s biggest public pension fund is a blow to environmental advocates, who in recent years have urged the fund managers to withdraw from coal, oil and natural gas companies, as well as banks that lend to the fossil fuel projects. It is also emblematic of two conflicting ideas of how to address climate change: Divest from companies or engage with them to argue for a given set of issues.
RL Miller, chairwoman of the California Democratic Party’s environmental caucus and co-founder of Climate Hawks Vote, presented at the hearing against the proposed changes. . .
Miller wants CalPERS to dump investments connected to oil sands in Canada; Energy Transfer Partners, the company erecting the Dakota Access pipeline through Native American land in North Dakota; and Exxon Mobil Corp., which is one of its biggest holdings. In Exxon alone, the fund has more than $1 billion worth of stock, according to the latest figures available.
Heh. Now if the state pulls the plug on the high speed rail to nowhere, I’ll start to think there might be hope for this place.