A California bill seeking to prohibit the state’s public pension funds from investing in fossil fuel companies was passed by the Senate on Tuesday.
Senate Bill 252, also known as the Fossil Fuel Divestment Act, was introduced in Californian state legislature by Senator Lena Gonzales in February 2022 and comes in response to repeated public calls for both the California Public Employees’ Retirement System and the California State Teachers’ Retirement System to divest from fossil fuels.
Under the proposed legislation, both funds would be required to liquidate assets held in the 200 largest publicly traded fossil fuel companies by July 1, 2031, which is expected to amount to $15 billion in total divestment.
The bill was approved 22-10 by the Senate on Tuesday and will now be subject to review by the state Assembly and signed by Governor Gavin Newsom.
CalSTRS and CalPERS manage $327.7 billion and $479.6 billion in assets, respectively. Despite both fund managers having net-zero by 2050 commitments in place, they have openly opposed the bill for seeking to restrict investments and fund manager decision-making.