CalPERS wants to hold on to its stake in companies that may be doing business with the controversial Dakota Access oil pipeline despite a proposal from an assemblyman that would compel the retirement fund to divest from the project.
The California Public Employee Retirement System next week is scheduled to consider a bill from Democratic Assemblyman Ash Kalra of San Jose that calls on the system to cut its ties with any company funding or constructing the 1,100-mile pipeline.
That language could force CalPERS to break with major banks, such as Wells Fargo and J.P. Morgan Chase. The agency is urging its board of directors to oppose Kalra’s bill, arguing that divesting would diminish CalPERS’ influence over the project and jeopardize up to $4 billion in assets.
“Investors that divest lose their ability as shareowners to influence the company to act responsibly,” reads a report from CalPERS’ Legislative Affairs Chief Mary Anne Ashley and Chief Operating Investment Officer Wylie Tollette.
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For months, protestors have gathered to rally against the pipeline, urging the U.S. Army Corps of Engineers to reject an easement that would allow the pipeline to cross Lake Oahe on the Missouri River.
The Seattle City Council on Tuesday faced similar pressure to divest from banks that give loans to the pipeline project. It voted to break with Wells Fargo, a bank that The Seattle Times reported handles about $3 billion a year in city revenue.
The Army on Tuesday announced it would grant the easement, following a directive by President Donald Trump to expedite the project’s approval. The pipeline would carry crude oil from Stanley, N.D., to Pakota, Ill.