The bill would require the California Public Employees’ Retirement System and the California State Teachers Retirement System to divest from coal companies by July of 2017.
The Assembly passed the bill largely along party lines. CalPers, the largest pension fund in the nation, currently holds investments in 30 coal companies.
Republican Assemblyman James Gallagher says the measure would compromise the fiduciary responsibility of the pension systems.
“We need to make those decisions based on good sound financial decisions not based on emotionalism,” says Gallagher.
But Democratic Assemblyman Rob Bonta says the bill requires pension boards act in the best interest of investors. He says coal combustion is the leading cause of global climate change.
“California is a world leader in the fight against climate change, certainly we can find more sustainable and profitable investments for our public pension funds that better suit our values," says Bonta. "SB 185 recognizes what analysts are saying, coal has become a bad investment.”