Editors' Note: In our last issue, Andrew Walzer urged faculty to support CalSTRS divestment from fossil fuels. Given the climate crisis, we enthusiastically support his efforts, and below you'll see a further article by him. In the interests of balance, however, we've included the opening paragraphs of a recent statement from CalSTRS. The full document can be found on the CalSTRS website.

 

CalSTRS Perspective on Divestment 

 

“CalSTRS acknowledges there are interested parties and stakeholders calling for fossil fuel divestment. Divestment is a last resort action that can have a lasting negative impact on the health of the Teachers’ Retirement Fund, while also severely limiting our ability to shape corporate behavior for long-term sustainable growth.

 

“We share this sense of urgency regarding climate change and are focused on understanding and responding to the risks it presents both to the CalSTRS Investment Portfolio and to sustainable economic growth. That’s why it’s imperative we continue to use our influence with policy makers and companies—including the fossil fuel industry—to help ensure an equitable, prosperous and low-carbon world for future generations.”

 

CalSTRS Perspective on Fossil Fuel Investment

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CalSTRS, Divest from Enbridge, Line 3

 

by Andrew Walzer

 

In the last issue of SEI Reports, I wrote about how our CalSTRS pension funds are invested in fossil fuel companies and that if we care about our planet and our survival as a species, the CalSTRS board should support the divestment of our pension funds from fossil fuels.

 

One example of a fossil fuel company that CalSTRS is invested in is Enbridge, which is expanding the capacity of the Line 3 pipeline and rerouting it through Northern Minnesota. This violates Native American treaty rights, ignores the environmental impact of building a pipeline at the headwaters of the Mississippi, and expands the fossil fuel infrastructure in violation of the Paris Climate agreement. 

 

Enbridge has a history of oil spills. In 1991 more than 1.7 million gallons of oil were spilled near the Mississippi river, and Enbridge has had a record of one spill every 20 days since 2002.

 

By demanding the divestment of our CalSTRS pension funds in Enbridge, we are standing in solidarity with Native American tribes who are protesting racist policies of placing pipelines on land that is guaranteed protection by Native American treaty rights.

 

In response to the pressure that it has received to divest, CalSTRS argues that its policy of “engagement” with fossil fuel companies by investing in them is a more effective strategy because it can persuade these companies to shift their resources elsewhere. This strategy has failed miserably. In 2017 CalSTRS, in response to Enbridge’s investment in the Dakota Access Pipeline, supported a shareholder statement that asked Enbridge to report on “social and environmental risks, including indigenous rights risks.” This proposal was rejected by Enbridge shareholders by a vote of over 70%. 

 

By divesting from Enbridge and other fossil fuel companies, we would be sending a powerful message to the fossil fuel industry and to our political leaders that the era of fossil fuels is over.

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Andrew Walzer is a Los Angeles City College Humanities Professor and member of Fossil Free California.

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