California Teachers Pension to Divest U.S. Thermal Coal Assets

  • Board cites industry's financial and environmental trends
  • Vote affects $1.5 million of Calstrs's $186.1 billion holdings

The California State Teachers’ Retirement System board voted to divest from U.S. companies that produce coal for energy generation because of the industry’s ailing finances and environmental impact.

The pension system, with $186.1 billion of assets as of Dec. 31, has about $1.5 million invested in coal company stocks and bonds, according to a statement Wednesday.

“We determined that given the financial state of the industry, the movement of the regulatory landscape and coal’s impact on the environment, its presence reflects a loss of value,” Sharon Hendricks, chair of the investment committee, said in the statement. “We will now move ahead to determine the fiduciary appropriateness of non-U.S. thermal coal companies in the Calstrs portfolio and make an additional decision based on those findings.”

Insurers, cities and other investors controlling more than $3.4 trillion in assets have pledged to keep some or all of their money out of fossil-fuel companies, a high-water mark for the divestment movement, climate-change advocates said in December. A state law passed last year requires Calstrs and the California Public Employees’ Retirement System to determine the fate of thermal coal company investments by July 2017.

Affected companies are Cloud Peak Energy Inc., Hallador Energy Co., Peabody Energy Corp. and Westmoreland Coal Co., Calstrs said.

Thermal coal is used for generating energy, while metallurgical coal is used for iron and steel-making.

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