How much do fossil fuel investments cost public employee pension funds?

According to a University of Waterloo study, the answer is a lot.

Using Bloomberg Terminal data, the researchers looked at the actual portfolio performance between December 31, 2012 and December 31, 2022 of six funds: the Alaska Permanent Fund Corporation, California Public Employees’ Retirement System, California State Teachers’ Retirement System, New York State Teachers’ Retirement System, Oregon Public Employees’ Retirement Fund, and the State of Wisconsin Investment Board.

Then they analyzed how the funds would have done over the same time period if the fossil fuel investments had been divested, and their value spread evenly among the remaining holdings.

The analysis found that while the total actual value of the six funds was $402.8 billion at the end of 2022, they would have been worth $424.6 billion without the fossil fuel holdings.

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I think we know that public utilities are not known for their growth rates. Typical is 2% per year – similar to population growth. Except for regional growth in the sunbelt balanced by declines in the rust belt.

I think the study revealed that other investments had better growth rates. Not an earth shattering discovery.


Did the article or the linked research summary mention public utilities?

Not that i noticed but public utilities are the largest users of coal by far.