Dakota Access Pipeline activists protest at CalPERS
The California Public Employees’ Retirement System joined more than 150 other international investors in a letter Sunday urging the world’s largest economies to remain committed to the 2015 climate change accord known as the Paris Agreement.
The letter is both a sign that investors consider the pact to be in jeopardy and an example of the shareholder activism that CalPERS has highlighted this year while it faced calls from environmental activists to divest from certain energy companies.
The agreement took effect in November 2016, committing countries to reduce greenhouse gas emissions over time. CalPERS favors it as a means to reduce the risk of climate change, which may upend economies in unknown ways if environmental disasters unfold.
The pension fund embraced the Paris climate agreement from the beginning, signing a pledge supporting it in December 2015 and later having its former chief executive tout the accord at a United Nations speech.
“We think it’s really important that the financial markets speak loud and clear on the need for this framework,” said Anne Simpson, the investment director for sustainability at CalPERS.
President Donald Trump last month criticized the agreement as “one-sided.” An anticipated discussion on funding the Paris agreement also disappeared from the agenda for an upcoming meeting for the G20 – the group of the world’s 20 largest economies – in Germany.
“Investors believe it is vital that the governments of G7 and G20 nations continue to publicly express their commitment to support climate finance to both mitigate and adapt to the effects of climate change,” the letter reads. It was signed by investment funds that manage more than $100 trillion in assets.
This year, CalPERS plans to press climate change issues with at least 15 companies during proxy votes. Its votes aim to urge companies to disclose their strategies for addressing climate change.
Simpson said the efforts stemmed from a review of CalPERS investments that showed 100 companies caused 50 percent of the greenhouse gas emissions generated by the 11,000 companies in which the pension fund held shares.
Environmental activists this year have urged CalPERS to go further in climate change advocacy by divesting from fossil fuel companies. They so far have mostly focused on Energy Transfer Partners, the company building the controversial Dakota Access Pipeline.
At an April CalPERS meeting, climate activists argued the fund’s proxy votes and letters were falling short in protecting the environment.
“I’m here to ask you to divest from each of the investors in Energy Transfer Partners; to significantly increase your engagement as asset owners committed to working on behalf of all Californians to combat the threat of climate change; to retain the ability to divest when the great moral challenges of our time demand it; and to tell you that the world is watching what you do,” said RL Miller, an activist who helped organize one of the divestment demonstrations at CalPERS earlier this year.
But CalPERS board members reiterated their opposition to divestment, contending that pulling out of certain stocks could risk pensions and relinquish the fund’s influence.