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Students demand that teacher pension fund revoke fossil-fuel investments

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CalSTRS holds $6 billion in fossil-fuel company stock, and the next generation wants to see a dramatic change.

More than 500 Bay Area high school students gathered outside the San Francisco Federal Building on 7th Street Friday before marching down Market Street to City Hall, calling on the California State Teachers’ Retirement System, the state’s pension fund for California public school teachers, to divest its investment holdings in fossil fuel companies.

They pointed out that that California’s wildfires demonstrate the need to reduce emissions.

Hundreds marched down Market Street. Photo by Garrett Leahy

“This climate strike has been going on for years, but we’re feeling the effects of climate change,” said Anya Draves, a senior at Berkeley High School and President and Co-Founder of the Berkeley High Zero Waste Club. “With the wildfires, the red skies, the smoke…we’re the ones who are going to be living on this earth for years to come we have the energy and the voices to fight back.”

Draves was not alone in her concern about the future of the planet as the brunt of the effects of climate change begin to unfold.

Aniya Butler, a Sophomore at Oakland Charter High School and Hip Hop and Climate Justice Coordinator with Youth vs Apocaylpse, a youth-led group calling on governments and corporations to take dramatic action against climate change, expressed the importance for student action to pressure CalSTRS to divest from fossil fuel companies, saying that following reports that effects of climate change now may be, in part, irreversible, young people must put pressure on corporations, hedge funds, and other wealthy and powerful entities to invest in sustainable industries.

“After the IPCC report came out, I feel like people are opening their eyes, like ‘okay’ this crisis is real and now we have to do something about it,” said Butler. “The youth are the future, and the climate crisis is something that will affect our future. We have to recognize that if we want to live in a future where we can thrive, where we can breathe, we are going to have to be the ones out here organizing actions, calling out the government, and calling on these corporations to divest from destruction and invest in our future.”

CalSTRS is the largest educator-only pension fund in the world and holds roughly $6 billion in holdings of fossil fuel companies, including $327,841,000 in Chevron, $356,677,000 in Exxon-Mobil, and $58,759,000 in Valero, with the pension fund itself is valued at $310.9 billion.

Members of CalSTRS leadership did not respond to requests for an interview, and CalSTRS media representativesdeclined to be interviewed. CalSTRS spokesman Ricardo Duran said in an email statement that the pension fund supports investing in sustainable companies, but did not elaborate on how they will express that support or how much they hold in sustainable investments.

“CalSTRS recognizes that climate change presents a material and existential risk to society and the economy,” Duran said. “We are committed to influencing public policies, engaging with companies and promoting an orderly transition to a low-carbon economy through investments.”

Both State Treasurer Fiona Ma and State Superintendent Tony Thurmond, who are members of CalSTRS Teacher Retirement Board by virtue of their respective offices, have previously expressed their support for divesting from fossil fuel companies, although discussions around divestment internally appear to be more mixed.

CalSTRS has argued that divesting from fossil fuels is not currently feasible due to the immaturity of renewable energy sources relative to oil and gas, and the continued importance of fossil fuel power to developing countries:

New technologies need to continue to evolve to make them viable on a global scale to support the transition to a low-carbon future…Divesting from fossil fuel doesn’t reduce greenhouse gas emissions and doesn’t address all the different factors that contribute to climate change. We are focused on actions that reduce emissions and support an orderly low-carbon transition.

Because of the continued relevance of fossil fuels, they remain a profitable investment, contributing in part to a recent windfall for the pension fund, which grew 27.2 percent between June 2020 and June 2021, increasing from $246 billion to $308.6 billion, riding a wave of record highs in the stock market at the height of the pandemic.

Because of the risks that divestment could reduce the valuation of the Teachers’ Retirement Fund, CalSTRS has deemed divestment as a “last resort,” saying that they instead prioritize using their holdings as leverage to transition fossil fuel companies towards more sustainable business practices.

Butler said that she and other students that support fossil-fuel divestment by CalSTRS want teachers to retire in financial security, but want CalSTRS to be more aggressive in investing in sustainable businesses and industries while transitioning away from fossil fuels.

“We care about these teachers, we’re not saying take their money away, we’re saying divest from fossil fuels and invest in practices that will end the climate crisis,” said Butler.

CalSTRS has also acknowledged the potential of climate change to reduce the valuation of its portfolio, caused by its impact on the environment, infrastructure, and labor, as stated on the agenda for an upcoming CalSTRS Investment Committee meeting, where members will decide whether to pledge to hold a net-zero carbon emissions portfolio by 2050:

Investment risks associated with climate change and the related economic transition—physical, policy and technology driven— materially impact the value of CalSTRS’ investment portfolio.

The fund’s support of a low-carbon transition appears to be centered around exploring new investment in greener energy without divestment from fossil fuels. Already, CalSTRS’ Teacher Retirement Board has approved changes to CalSTRS’ Sustainable Investment and Stewardship Strategies investment policy to allow more investment in “low-carbon solutions relating to energy, technology-enabled resource efficiency, water and waste management, land and agriculture management, and food security,” as stated in the same upcoming Investment Committee agenda. It is not clear if any investment of this kind has occurred.

Butler is not buying it.

“I feel like it’s just an excuse,” said Butler. “The places that CalSTRS is investing it is affecting low-income communities, and so for them to say that they want to use their clout to pushing Chevron towards sustainability is an excuse so that they can ignore the fact that [Chevron] is harming Black and brown people.”

An August 10 flare-up incident occurred at Chevron’s Richmond oil refinery, releasing sulfur-dioxide and raising concerns over local air quality.

Youth vs. Apocalypse will hold actions every Friday, either in-person or remote, according to Butler. Those interested in participating can learn more at their website, their social media, or by texting “@yvajoin” to 81010.