The Golden State's Not-So-Golden Goose

California set up a plan to invest state pension funds in socially responsible businesses. The results have been disastrous

In March 2000, California State Treasurer Philip Angelides announced a bold new initiative. Angelides felt the Golden State could do good for both the citizens of the world and its retirees by taking state pension fund money out of two asset classes that were performing horribly at the time, tobacco stocks and emerging markets, and reinvesting in something with a social benefit—businesses and real estate in low-income neighborhoods in his home state. Angelides called the initiative the "Double Bottom Line," because it would produce both a social return and strong investment results.

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