The board of the California State Teachers’ Retirement System (CalSTRS) has voted unanimously to divest the fund consisting of all thermal coal holdings outside the US starting from next month.
The decision taken by the board is in line with the long-term global perspective and its fiduciary duty of CalSTRS. The action is also taken by taking into existing and future risks to the environment from operating thermal coal plants.
CalSTRS investment committee chair Harry Keiley called the divestment decision as a statement to the global marketplace that it will not tolerate the harmful effects of climate change irrespective of the recent actions taken by the US government.
Keiley added: “In just the past year, we have consistently reinforced our unwavering commitment to the Paris Climate Accord and our belief that climate risk is a drag on our portfolio’s long-term performance.”
The divestment action taken by the Californian fund for its non-US thermal coal holdings represents nearly $8.3m in Indonesia-based PT Adaro Energy, South African firm Exxaro Resources and Australian firm Whitehaven Coal.
Further, the public pension fund states that the decision it has taken will put an end to any investment in future active non-US thermal coal assets.
California State Treasurer John Chiang, who is also a Teachers’ Retirement Board member, said: “Coal is the fuel of America’s past. At a time when clean-energy jobs far outpace those of the dying coal industry, why should we continue to invest in a product that pollutes the air, sickens our children and contributes to global warming.”