The California Assembly in the US has approved a new bill requiring state pension funds, California Public Employees’ Retirement System (Calpers) and California State Teachers’ Retirement System (CalSTRS), to divest their investments in coal companies.
The bill SB 185 (De León), which passed on a 43-27 vote, will now require the governor’s approval.
Senate President pro Tempore Kevin de León said: "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.
"California’s utilities are phasing out coal, and it’s time our pension funds did the same."
Presenting the bill, Assemblyman Rob Bonta (D-Oakland) said that coal is the fuel of the past and it is no longer a wise investment for its pensioners.
The bill is expected to be the first measure of its kind nationwide should it be signed into law.
Public pension funds CalPERS and CalSTRS have $292bn and $191bn in assets respectively, as of August 2015.
At present, CalPERS invests in between 20 and 30 of the type of thermal coal mining companies with a cumulative value of between $100m and $200m.
CalSTRS spokesman said the fund’s investment portfolio holds about $40m in thermal coal.
Due to climate concerns several financial institutions, universities and religious organisations are cutting ties with coal companies.
Image: The new bill requires state pension funds to divest their investments in coal companies. Photo: courtesy of SOMMAI / FreeDigitalPhotos.net.