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.