By Robin Respaut
(Reuters) - California pension plans would divest all assets related to the coal industry under a measure the leader of the state senate said he will propose to reduce support for an industry that critics blame for contributing to climate change.
Senate President Pro Tem Kevin de León said on Monday he would introduce a bill that would require state pension plans to divest from coal assets. He had just returned from United Nations talks in Lima, Peru on international efforts to fight climate change.
At the NextGen Climate Leadership Forum in Oakland, de León said divesting state pension funds from coal would "provide another example of how California leads and defines the future economy."
The California Public Employees' Retirement System and the California State Teachers' Retirement System, the two largest U.S. pension funds, together hold almost a half trillion dollars worth of assets.
"Any efforts to undermine our climate change policies are undermining our global leadership and the future of our economy. The world is watching and we can't stop now," de León said in a prepared statement.
In response, CalPERS said it was working aggressively to engage with fossil fuel companies to ensure they are taking appropriate action to manage the physical and capital risks associated with climate change. CalPERS invests in approximately 30 coal mining and producing companies with holdings valued at approximately $167 million.
"We firmly believe that engagement is the first call of action, and results show that it is the most effective form of communicating concerns with the companies we own," spokesperson Brad Pacheco said in an emailed statement.
CalSTRS, too, said it wanted to proceed with caution and "carefully weigh our duty to perform profitably with consideration of environmental, social and governance impact of those investments."
Measuring "the ultimate impact of our investment in coal" is on the pension fund's radar for the coming year, CalSTRS said. It said preliminary assets in global coal investments totaled $800 million, part of a $100 billion global equities portfolio.
(Reporting By Robin Respaut; Editing by David Gregorio)