Report Claims CalPERS’ Sustainability Portfolio Runs on Oil

The California Public Employees’ Retirement System’s $100 billion sustainable investing strategy includes billions of dollars invested in 52 of the 100 largest greenhouse gas emitters in the U.S., most of the world’s largest oil companies and other major air polluters, according to a report from labor and environmental coalition California Common Good.

According to the organization, it used public records, including filing a California Public Records Act request, to discover details of CalPERS’ Climate Action Plan.

“The findings paint a very different picture than what CalPERS has portrayed at its board meetings, in its communications and the news media,” the report stated. “In response to our records request, CalPERS only disclosed $25.7 billion worth of publicly traded ‘climate solutions’ securities in their climate portfolio.”

According to California Common Good, among the disclosures it received was information showing approximately $3.6 billion was invested in companies that appear on science-based lists as the “most dangerous emitters of greenhouse gases operating in the world.” According to the report, this includes BP, Chevron, ExxonMobil, Marathon Petroleum, Occidental Petroleum, Shell Oil, Valero Energy and the state-controlled oil and gas companies in Brazil, China, Malaysia, Saudi Arabia and the United Arab Emirates.

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The report also stated that the Climate Action Plan has investments in Berkshire Hathaway, Vistra Corp., the Southern Co., Duke Energy and American Electric Power, identified as the top five greenhouse gas emitters in the U.S.

As of November 2024, CalPERS stated that its commitments to sustainable investments have surpassed $53 billion. Meanwhile, California Common Good claims the pension giant has refused to release information on the remaining $27 billion of the $53 billion invested under its sustainable investing strategy.

California Common Good also stated in the report that a “peculiar feature” of CalPERS’ climate plan is that the pension fund often classifies the same stock or bond as being both included and excluded from the sustainability plan. California Common Good cited as an example that CalPERS’ retirement assets portfolio, as of September 30, 2024, included $549.58 million invested in Shell and Shell International Finance. The organization added that CalPERS also classifies $40.8 million of its Shell holdings as climate solutions.

In response to the report, CalPERS did not dispute the investments but stated, as it did when the Climate Action Plan was announced, that working with GHG-emitting companies is more effective than divesting from them. CalPERS added that divestment merely passes the asset on to others, who might have no interest in influencing companies to reduce their carbon output.

“The goal of CalPERS’ $100 Billion Climate Action Plan is to help provide the capital needed to finance the global energy transition,” John Myers, chief of CalPERS’ office of public affairs, said in an emailed statement. “Choosing a pro-investment approach rather than wholesale divestment is not only pragmatic but also consistent with our fiduciary duty.”

Myers said that without the capital from investments, “efforts to increase the use of renewable and other clean energy sources could fall short of making meaningful progress to combat climate change,” adding that CalPERS would miss out on the resulting opportunities and investment returns.

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Tags: California Common Good, California Public Employees’ Retirement System, CalPERS, Climate Action Plan, Greenhouse Gas Emissions, John Myers, sustainable investing

Danish pension fund AkademikerPension announced Friday that it plans to sell its remaining 200 shares of Tesla Inc. stock and add the company to its exclusion list, unless changes—including approval of a shareholder proposal regarding labor right—occur.

The fund cited “labor rights and management” among the problems it has with the company, including board independence. In addition, it stated: “[Tesla CEO] Elon Musk’s actions create increased return risk.”

CEO Jens Munch Holst, according to a translated version of a statement from the pension fund, said of the decision: “It’s no secret that Tesla has been a market leader in the green transition for years. But when we can tick off a long list of problems year after year with no prospect of any improvement—in fact, quite the opposite—it’s hard to argue that we should remain invested.”

The fund statement offered three reasons for deciding to exclude the electric vehicle maker from its holdings:

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Tesla has “worked against employees’ labor rights for years and has a long history of union resistance and discrimination in the workplace”;
“Tesla has major challenges regarding board independence and is by far the mega-cap stock with the least independence on its board, which literally consists of friends and family”; and
“It is impossible to talk about Tesla without talking about Elon Musk. He is the definition of Tesla. But recently he has increasingly interfered in American and European politics. He has publicly supported controversial political figures, spread misinformation and criticized governments. This has created major risks to returns, as many investors and customers have turned their backs on the company. In short, Elon Musk is, in our opinion, destroying the brand and the value.”

The fund held out a “theoretical possibility” that it might cancel the exclusion, if Tesla’s board, at its June annual general meeting, were to support a shareholder proposal from the pension fund regarding employees’ rights to form and join a union.

“We do not have high expectations that the proposal will be voted through, so the exclusion is ready in the drawer, but the Tesla board of directors will have one last chance to change our position,” Munch Holst said in the statement. “It is no secret that we are big advocates of active ownership. And we have been trying for years to get the company to make some of the changes that we find necessary. But sometimes you have to realize that the desired change is too far away or there is no prospect of it. And that is the situation with Tesla, we assess.”

AkademikerPension is a member-owned pension fund for academics. It manages a total portfolio of 145 billion kroner ($21.15 billion) for 174,500 members.

Tags: AkademikerPension, Elon Musk, Jens Munch Holst, Shareholder Activism, Tesla