Fossil fuels divestment in California

Investment Analysis Clubs Macro Economic Trends and Risks
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California’s two powerful public employee pension funds would be required to withdraw their investments from fossil fuel companies to help fight climate change under a state Senate bill introduced Thursday.

Authored by Sen. Lena A. Gonzalez, D-Long Beach, and co-sponsored by Sen. Scott Wiener, D-San Francisco, the legislation would give the California Public Employees’ Retirement System and the California State Teachers’ Retirement System until July 2027 to divest a combined $9.9 billion from the Carbon Underground 200 — a list of companies considered to have the greatest potential for future emissions from their coal, oil and gas reserves.

The bill also would prohibit any new investments in those companies.

CalPERS and CalSTRS are the two largest, non-federal public pension funds in the United States, with approximately $469 billion and $327 billion in assets, respectively.

https://www.pressdemocrat.com/article/news/new-state-senate-…

Jaak

P.S. -
About 1,500 institutional investors from around the globe, with assets approaching $40 trillion, have pledged to divest their fossil fuel holdings, according to 350.org and stand.earth. They include everyone from Queen Elizabeth and Harvard University to the Episcopal Church and New York City.

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"About 1,500 institutional investors from around the globe, with assets approaching $40 trillion, have pledged to divest their fossil fuel holdings, according to 350.org and stand.earth. "

not to worry. Plenty of folks will buy oil stocks and natural gas stocks.

Prices of course will rise. $100 bbl oil? next is $200 bbl/oil and a lot of CA will be hurting as gas prices rise to $8 or $10 gal for their hundred million fossil fueled engines from fire trucks to ambulances to snow plows up north. Not to worry.

Same for Harvard - let’s see…maybe we should just shut off the NG to Harvard instead? They don’t want to invest in fossil fuels, fine. Let them not use ANY. Shut them off. Same for all their vehicles. Let 'em freeze. And all their faculty and help who heat their homes with fossil fuels. Heck, let them freeze. Or spend $15,000 each for electric heat pumps for their houses, and Harvard a billion for converting their buildings to electric ‘heat pumps’.

Woke investment… greenies.

I note that 99.999% of those investors have NOT signed a pledge to get rid of all their fossil fueled vehicles, home heating, vacation home heating, private planes, yachts!..nor employ any one who uses fossil fueled vehicles, lives in a fossil fuel heated house…

t.

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About 1,500 institutional investors from around the globe, with assets approaching $40 trillion, have pledged to divest their fossil fuel holdings, according to 350.org…

Speaking of 350.org, they’re in the new this week. Overspending, it seems.

www.politico.com/news/2022/02/20/350org-mckibben-boeve-keyst…
The group that revived a slumbering environmental movement by focusing on big targets was flying high. It was no longer just a plucky collection of friends from a Vermont college and their luminary founder, Bill McKibben. It was a global force. The $800,000 retreat at a five-star luxury resort in Killarney, Ireland in March 2019 proved it.

The rise for 350.org had been meteoric. The crash would be, too…

It was at the Killarney retreat that May Boeve, the executive director and one of 350.org’s founders, announced that she’d hiked the organization’s annual budget to $25 million…But 350.org had never eclipsed $20 million in revenue in a single year. When it quickly became clear it wouldn’t that year, Boeve said she initially kept the information largely to herself…The fallout would lead to mass layoffs, departures, exhaustion, distrust and a protracted labor battle that exists to this day…

DB2

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“the legislation would give the California Public Employees’ Retirement System and the California State Teachers’ Retirement System until July 2027 to divest a combined $9.9 billion from the Carbon Underground 200 — a list of companies considered to have the greatest potential for future emissions from their coal, oil and gas reserves.”

I wonder what investments they think will replace the income from those companies. Otherwise, how will the pension plans stay solvent?

There are few ‘renewable’ fuel companies paying enough dividends to support those pensioners.

Pension funds should stay out of political/social issues. Their purpose is to provide their members with income after retirement, not to support causes.

Social causes are the responsibilities of the appropriate levels of duly elected government.

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Piling on.

It’s as if the state senators don’t understand how important fossil fuels are to everyday life. Maybe they’re trying to win votes. This is nutty.

Divest when the fossil fuels are essentially gone. Geologically speaking, they’ll be gone very soon. In the meantime, how about letting the fund managers do their job?

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I do not think ethics in investing is a simple issue at all, and I think almost all of this thread showcases reflex arguments rather than thought.

My major investment holding since I first started having business success in the late 70’s has been in oil and gas working interests. All the same I find further the frivolous use of oil and gas, let alone development of more, to be utterly obscene and despicable, a slow motion murder of both people and the lands and climates they depend on. But divestment as a strategy is very weak.

I now give all my oil and gas earnings to sane politicians and organizations fighting to get us off fossil fuels. Divestment for me looks like idiot disarmament, because this war is being fought in political bucks.

david fb

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"My major investment holding since I first started having business success in the late 70’s has been in oil and gas working interests. All the same I find further the frivolous use of oil and gas, let alone development of more, to be utterly obscene and despicable, a slow motion murder of both people and the lands and climates they depend on. But divestment as a strategy is very weak.

I now give all my oil and gas earnings to sane politicians and organizations fighting to get us off fossil fuels."

Great idea but when the oil and gas companies stop producing oil and natural gas…then a few billion people will starve in a few years as fossil fuel fertilizers have increased crop yields by 300 to 400% over previous fertilizers, and we’ve already stripped most of the Pacific islands, down to bare ground, of all the guano that was the prime fertilizer before fossil fuel fertilizers, not to mention pesticides.

The world car industry would probably cease as no one has come up with an affordable substitute for grease, oil, lubrication - that keeps those windmills turning - that keeps the EV cars from seizing up and of course, allows wheel bearings to work and steering gears. Heck, we don’t need EVs, do we?

Not to mention all the ‘composites’ that are made with fossil fuels and probably half of new cars - plus of course, nylon fabrics and everything else in a car seat - from foam for cushions to coverings. Heck, we don’t need seats in cars. Back to wood seats! Benches!

Now, if you want to buy an EV, fine. Fly on only electrical powered airplanes , fine. Have roads made of wood… or maybe just dirt and gravel. Can’t have macadam without oil. Fill those potholes with dirt. No cement either. Nor asphalt shingles on rooftops.

Will be fun to watch your ideal world of ‘no fossil fuels’…and no products made from oil and natural gas as you starve the oil companies into bankruptcy with no financing.

Back to 1820 quickly.

t.

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I am waiting for someone to post a video of “I am just a Gigolo”

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I wonder what investments they think will replace the income from those companies. Otherwise, how will the pension plans stay solvent?

There is no investment that you can’t work around not having. Pension plans don’t just work off dividends, although that’s certainly part of it. They also do investing for the long haul, as we all do, and they also invest in lots of other areas include VC, real estate, and all sorts of other things.

There are few ‘renewable’ fuel companies paying enough dividends to support those pensioners.

Nobody says it has to be renewable energy, maybe it will be Coca-Cola, or an investment in Goofyhoofy’s New Age Smelling Salta, LLC. Could be anything, really,

Pension funds should stay out of political/social issues. Their purpose is to provide their members with income after retirement, not to support causes.
Social causes are the responsibilities of the appropriate levels of duly elected government.

Pension funds are answerable to their boards and their obligees. If they decide to steer away from a stock or a sector, that’s what they should do. If the two groups above don’t like it, they’ll agitate and change the direction. Presumably that’s why this particular board made this decision in the first place.

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goofy:“Nobody says it has to be renewable energy, maybe it will be Coca-Cola,”

Which is a corporation set on fattening up America and the world with HFCS laden high calorie high caffeine drinks that ‘hook’ kids at an early age - leading to obesity - diabetes - heart disease.

Name a company and there’s an ‘issue’ with it.

Worse, Coca-Cola is one of the many companies shipping tens of millions of single use plastic bottles, in plastic six pack plastic connectors that snag turtles and other sea life - polluting the world - and in the process, using probably a million or two barrels of fossil fuels to make those plastic bottles. Horrors!

Food companies? Same deal. Candy companies - oh , those individual wrapped in plastic (polluting and made from fossil fuels) candies and boxes. Oh, and they chop down forests to make those paper boxes, too. Millions of trees felled. Poor birds and animals left with no habitat. Horrors!

cell company? Building ugly polluting antennas radiating gigahertz frequencies that might bring down airplanes? Radiation concerns about too much RF exposure?

Internet companies? Internet web sites? Porn - ‘false news’ - conspiracy theories - you name it.

Beer or Alcohol companies? 25,000 slaughtered a year in drunk driving accidents and hundreds of thousands injured from ‘impaired drivers’. Oh, and don’t forget pot selling companies - more ‘impaired drivers’ from that too…plus drugged out teens dropping out, starting on hard drugs and METH…

Car companies ? Well, maybe Tesla if you don’t mind 500:1 PE ratio - if it is positive at all at this point - without massive former write offs carried forward. they end soon. Then what? . All the others? Busy selling FOSSIL FUEL cars by the millions. Hmmm…can’t own them, can we?

So if you start on the slippery slope, you can’t invest in much other than US treasury notes.

t

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Pension funds should stay out of political/social issues. Their purpose is to provide their members with income after retirement, not to support causes.

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LOL! The pension funds do not make the California laws - they need to follow California laws.

Jaak

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I note that 99.999% of those investors have NOT signed a pledge to get rid of all their fossil fueled vehicles, home heating, vacation home heating, private planes, yachts!..nor employ any one who uses fossil fueled vehicles, lives in a fossil fuel heated house…

t.

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LOL! They do not need to sign any pledges. They are pledging with their money by going into renewables, EVs, energy conservation, energy efficiency, developing laws and regulations to penalize fossil fuels consumption and carbon taxes.

Fossil fuels consumption is not growing any longer because people, cities, counties, states and countries are putting more and more money into non-fossil fuel investments.

People all over the world are sick and tired on fossil fuel pollution, oil spills, coal ash, refineries, fires, explosions, flaring, destruction of the environment and now global warming & climate change disasters.

Jaak

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david fb,

You seem to miscomprehend that which you do not agree with. You are prone to very much misread my posts as well.

Your being gay is an interesting irony because society has only recently opened up to understand you. Although running with the oil guys might not be running with people that are open to you.

Society was not always open to you. You are now using similar attitudes of the bigots towards you to what you do not understand well.

There is an old saw, “hurt people hurt people”.

Fossil fuels are profitable. That should not make them biblical in how you defend them. Have an open mind. You wont slip on a banana peel if someone disagrees with you in jest.

It is not offensive to discuss money and whoredom. It is silly as hell to discuss self love.

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Pension funds should stay out of political/social issues. Their purpose is to provide their members with income after retirement, not to support causes.


If attitudes are to protect investments as if the bible, then someone has made a mistake.

No one here is that weak minded that if an opposing idea is offered their head will explode and all will be lost. Right? I am having my doubts.

Social matters are far more important than money. Ouch a head over to the right of me just exploded. LOL
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Surely, if ones goal is to “help fight climate change”, it’s better to own stock in oil and gas companies so as to have a vote and influence decisions in those companies.

Selling the stock is giving up any form of control.

Oil and gas companies don’t care who owns their stock. They’ll just keep chugging along.

It just doesn’t make any sense.

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Jaak:“Fossil fuels consumption is not growing any longer because people, cities, counties, states and countries are putting more and more money into non-fossil fuel investments.”

“They are pledging with their money by going into renewables”

Anyone who STILL drives a fossil fuel car, heats their house with fossil fuels, employs people who drive to their mansions in fossil fuel vehicles, have fossil fuel ATVs, fly on fossil fuel airplanes or worse, their private jets, recreate on their private fossil fuel yachts, have multiple houses heated by fossil fuels or fossil fuel electricity…

are nothing but HIPPOCRITES and practicing ‘climate change greenwashing’!

“After declining in 2020, the combined production of U.S. fossil fuels (including natural gas, crude oil, and coal) increased by 2% in 2021 to 77.14 quadrillion British thermal units. Based on forecasts in our latest Short-Term Energy Outlook (STEO), we expect U.S. fossil fuel production to continue rising in both 2022 and 2023, surpassing production in 2019, to reach a new record in 2023.”

https://www.eia.gov/todayinenergy/detail.php?id=50978

Seems fossil fuel companies, after raising prices, have more than enough to fund their future growth through internal means and don’t need no investment from others.

I hope all these greenwashers sell their stocks en masse cheaply so I can jump in and collect the fat dividends for the next 20 years at dividend rates of 5 to 8%. Yeah! Bring it on!

BTW - world oil production increases relentlessly year after year.

Despite promises, China is now burning record amounts of coal.

t.

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Anyone who STILL drives a fossil fuel car, heats their house with fossil fuels, employs people who drive to their mansions in fossil fuel vehicles, have fossil fuel ATVs, fly on fossil fuel airplanes or worse, their private jets, recreate on their private fossil fuel yachts, have multiple houses heated by fossil fuels or fossil fuel electricity…

are nothing but HIPPOCRITES and practicing ‘climate change greenwashing’!

I disagree with the word “anyone” at the start of that. It should only be applied to people who do that stuff while demanding that others alter their lifestyles or otherwise sacrifice to reduce fossil-fuel use.

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5thhorse: Oil and gas companies don’t care who owns their stock. They’ll just keep chugging along.

It just doesn’t make any sense.

What part doesn’t make sense?

Oil companies often pay good to great dividends and I will be long gone before the need for their products is gone.

I’ve been seeing talk and even action of divesting fossil fuel stocks for many years but as soon as the price jumps due to shortages panic sets in with the driving public and politicians scurry around trying to get more production or imports going.

The fun one was when the Norwegian government announce they were going to divest themselves of their own national oil production company … after a quick trip to the woodshed with their voters they suddenly backed off on that stupid idea. }};-D

So the price of oil today is … oh dang up ~ towards two bucks a barrel in US and WCS (Canadian) closer to C$2.75.

Anymouse <somewhat amused but I’m retired and still drive a little Micra that gets half a small tank of gas about every 6-8 weeks>

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5thhorse: Oil and gas companies don’t care who owns their stock. They’ll just keep chugging along.

It just doesn’t make any sense.

tim443: What part doesn’t make sense?

The idea that a pension fund ridding itself of of oil and gas stocks will make one iota of difference to climate change. So they sell those stocks; someone else buys them. What has changed? Just the shareholder registry. Who cares?

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Who cares?

The Virtue Signalers…

The Captain

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