Divestment from fossil fuels has two major goals.
1) To make the collective wealth of those that work in California education speak for a better future for the generations that follow by divorcing our wealth from a product that is having such a negative impact on our planet.
2) Reduce the risk to CalSTRS and CalPERS associated with investing in fossil fuels when the world does take action on climate change. More and more economists realize that a Carbon Bubble has been created - much like the Housing Bubble prior to 2008 - and when we act on climate change the world will strand up to 80% of the fossil fuel reserves below ground, thereby rupturing the bubble. The sooner we divest from fossil fuels the less impact in will have on our pension funds when the Carbon Bubble burst. http://www.forbes.com/sites/ashoka/2013/07/29/divesting-from-fossil-fuels-means-a-cleaner-safer-and-more-resilient-future/
What makes divestment from fossil fuels possible?
The Teachers’ Retirement Board Policy Manual (Updated September 2012), Attachment A: Investment Policy for Mitigating Environmental, Social, and Geopolitical Risks (ESG) states:
"CalSTRS expects all investment managers, both internal and external to assess the risk of each of the following factors when making an investment. The manager needs to balance the rate of return with all the risks including consideration of the specific investments exposure to each factor in each country in which that investment or company operates."
CALSTRS 21 RISK FACTORS
Environmental
The investment’s long-term profitability from activities and exposure to environmental matters such as; depleting or reducing air quality, water quality, land protection and usage, without regard for remediation. Consideration should be given to how a company is dealing with the impact of climate change, including whether the government is taking steps to reduce its impact, exacerbating the problem, or oblivious to the risk.
2) Reduce the risk to CalSTRS and CalPERS associated with investing in fossil fuels when the world does take action on climate change. More and more economists realize that a Carbon Bubble has been created - much like the Housing Bubble prior to 2008 - and when we act on climate change the world will strand up to 80% of the fossil fuel reserves below ground, thereby rupturing the bubble. The sooner we divest from fossil fuels the less impact in will have on our pension funds when the Carbon Bubble burst. http://www.forbes.com/sites/ashoka/2013/07/29/divesting-from-fossil-fuels-means-a-cleaner-safer-and-more-resilient-future/
What makes divestment from fossil fuels possible?
The Teachers’ Retirement Board Policy Manual (Updated September 2012), Attachment A: Investment Policy for Mitigating Environmental, Social, and Geopolitical Risks (ESG) states:
"CalSTRS expects all investment managers, both internal and external to assess the risk of each of the following factors when making an investment. The manager needs to balance the rate of return with all the risks including consideration of the specific investments exposure to each factor in each country in which that investment or company operates."
CALSTRS 21 RISK FACTORS
Environmental
The investment’s long-term profitability from activities and exposure to environmental matters such as; depleting or reducing air quality, water quality, land protection and usage, without regard for remediation. Consideration should be given to how a company is dealing with the impact of climate change, including whether the government is taking steps to reduce its impact, exacerbating the problem, or oblivious to the risk.
