Editorial

CalSTRS Must Divest from Fossil Fuel Companies

By investing in fossil fuels, the California State Teachers’ Retirement System (CalSTRS) is complicit in environmental racism and climate chaos. CalSTRS is the public pension fund for California public school teachers. Every California public school teacher, including those at Berkeley High School (BHS), is required to contribute to a public retirement fund in California, the second largest of which is CalSTRS. According to Fossil Free California (FFCA), CalSTRS has over six billion dollars invested in fossil fuel producers and $17.5 billion invested in all fossil-fuel related companies. To support climate justice and students’ futures, CalSTRS must fully divest from the fossil fuel industry immediately.

On August 27, Berkeley High School (BHS) students attended a protest organized by the climate justice group Youth Vs. Apocalypse (YVA), demanding CalSTRS divest from the fossil fuel industry. This issue directly impacts California public school students, whose teachers’ money is invested in an industry threatening our futures and current health and safety. 

The harm caused by CalSTRS investments is reflected in the over $100 million CalSTRS has invested in Enbridge, the company building the Line 3 pipeline expansion, which would carry tar sands from Alberta, Canada to Superior, Wisconsin. 

According to Stop Line 3, an organization dedicated to preventing the pipeline expansion, Line 3 would undermine treaty rights of the Anishinaabe people, contribute to climate change, leave Indigenous land vulnerable to damage, and threaten the health of surrounding communities. Due to CalSTRS investments, our teachers’ money helps fund this. 

While CalSTRS has acknowledged the environmental impact of fossil fuels, in a 2020 article titled “CalSTRS perspective on fossil fuel divestment,” the fund argued that taking its money out of fossil fuels would prevent it from positively influencing fossil fuel companies through shareholder engagement.

However, despite CalSTRS’s attempts to engage with Enbridge, the Line 3 pipeline expansion project is moving forward. By divesting, CalSTRS would provide fossil fuel companies with a consequence for their practices. Staying invested after multiple failed engagement attempts does not create incentive for these companies to change because there are no consequences from CalSTRS for neglecting to do so. 

Furthermore, although CalSTRS’s divestment alone would not topple the fossil fuel industry, it could help stigmatize it. CalSTRS is the second largest public pension fund and the largest teachers’ retirement fund in the United States, and its investments hold weight. By divesting, CalSTRS could send a message that it is no longer acceptable to invest in the fossil fuel industry, prompting other shareholders to follow suit.

In response to calls for divestment, on September 1, 2021, the CalSTRS board voted to achieve net zero greenhouse gas emissions in its investment portfolio by 2050 or earlier. 

However, this is not the same as voting to completely divest from the fossil fuel industry as soon as possible. Theoretically, CalSTRS could reach net zero emissions by offsetting investments in fossil fuels through methods other than divesting. 

As stated by Corporate Accountability, “The idea behind Big Polluters’ use of ‘net zero’ is that an entity can continue to pollute as usual—or even increase its emissions—and seek to compensate for those emissions in a number of ways.”

A 29 year timeline also fails to address the urgent need to drastically reduce emissions to prevent worsening the climate crisis.

The CalSTRS board could vote to divest from the fossil fuel industry. However, currently only two of 11 CalSTRS board members, California State Treasurer Fiona Ma and California Superintendent of Instruction Tony Thurmond, have publicly stated their support for CalSTRS to fully divest from fossil fuels. 

It’s time for CalSTRS to stop pitting the needs of teachers and students against each other, and withdraw support from an industry that threatens us all. To support divestment, California public school teachers can contact CalSTRS as shareholders and advocate for divestment, and both students and teachers can call-in to CalSTRS board meetings asking CalSTRS to divest. Students and teachers can also join campaigns using long-term strategies to push CalSTRS to divest.

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