CalPERS and more than 100 other investment groups are calling on banks financing the controversial Dakota Access Pipeline to pressure the company building it to reroute it away from the American Indian tribe that has protested its construction.
The California Public Employees’ Retirement System cited its concerns that construction would lead to an “escalation of conflict and unrest as well as possible contamination of the water supply” that could in turn tarnish the banks’ reputations and cause them to lose customers.
It’s asking the banks to ensure that the project addresses the concerns of the Standing Rock Sioux, which sought to block a leg of the pipeline that would pass under a reservoir that is critical to the tribe’s water supply.
“We call on the banks to address or support the tribe’s request for a reroute and utilize their influence as a project lender to reach a peaceful solution that is acceptable to all parties, including the tribe,” the letter reads.
CalPERS, the $309 billion retirement fund, released the letter just days after dozens of impassioned protesters called on it to divest from the project. Assemblyman Ash Kalra, D-San Jose, also has submitted a bill that would compel CalPERS to divest from the project.
Kalra issued a statement praising CalPERS’ request for a new pipeline route. He is not withdrawing his divestment bill, his spokeswoman said.
“As a significant investor in the Dakota Access Pipeline, it is important that California continues to take steps to respect the sovereign rights of the Standing Rock Sioux tribe and raise awareness on the environmental impacts the Dakota Access Pipeline would have on its lands,” Kalra said.
CalPERS owns about 1 million shares of Energy Transfer Partners, the company behind the pipeline. It also has invested in the banks that are believed to be financing the 1,100-mile pipeline, according to a CalPERS report released earlier this month.
The fund’s board of administration requested options to engage with the company.
“We believe that engaging with the companies we own is the first course of action to effect change and a preferred option over divestment where we lose our voice as an investor,” Anne Simpson, CalPERS’ investment director for sustainability, said in a news release.
The Army Corps of Engineers on Feb. 8 granted an easement that would allow the pipeline’s construction below Lake Oahe, reversing a December decision it announced in the last weeks of the Obama administration.
Energy Transfer Partners did not immediately reply to a request for comment.
R.L. Miller, who helped organize the CalPERS protest this week, said she was glad to see that the fund was using its clout to influence the project.
“CalPERS has started to listen to its members, who don’t want their money invested in this fossil-foolhardy debacle,” she said in an e-mail.