CalPERS isn't divesting from fossil fuels, but climate activists keep pushing

William Melhado, The Sacramento Bee on Nov 17, 2025

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Year after year, various groups have petitioned the state’s largest pension system to divest its billions of dollars from fossil fuel companies as the consequences of climate change continue to impact California.

While the California Public Employees’ Retirement System agrees with the activists that climate change presents financial risks to the fund, it doesn’t support divestment. CalPERS maintains that divestment increases investment risk, loses money and endangers the fund’s fiduciary duty to provide benefits for California retirees.

Despite this, climate activists keep showing up to CalPERS board meetings to voice their concern.

On Monday morning, dozens of climate activists petitioned the state’s largest retirement system to take more drastic steps beyond the pension fund’s current climate action plan and divest from oil and gas companies.

The most eye-catching of the protesters on Monday was a group wearing burlap tunics whose faces were smeared with ashes. The protesters stood silently in front of the CalPERS board members during a public comment period, their messages of “Habitat Loss,” “Sea Level Rise” and “Mega Fires” affixed to their fronts and backs.

The group calls itself the “Climate Lamentors,” and it’s one part protest group and one part performance art piece, said Claire Schoen, one of the participants in Monday’s demonstration.

“The purpose is to embody the grief that many people hold about the impacts of climate catastrophe,” Schoen said after the demonstration.

Notably, many of the activists present on Monday were older, which Diana Cassady said was because younger CalPERS members are unable to attend meetings taking place during the workday.

Cassady, a former public health sciences professor at UC Davis, is a member of the group Third Act, an environmental organization led by people over 60. She pointed to the University of California’s divestment from fossil fuels in 2020 as an example of another institution that has heeded activists’ calls to remove retirement investments from oil and gas companies. That divestment campaign was pushed by the group Fossil Free California, members of which were also present on Monday.

“By moving fossil fuels out of the pensions, the divestment movement is saying we no longer trust this industry,” Quinn Eide, the director of Fossil Free California, said in an interview.

Eide noted that CalPERS previously divested from South African companies in protest of apartheid. To hold companies with significant carbon emissions accountable, CalPERS needs to take a strong position on divestment, Eide said.

Later in the day, CalPERS board member Lisa Middleton acknowledged the calls for divestment and said that CalPERS should seek out additional experts who can speak to the question raised by activists: “What is achieved from simply walking away from an investment, as opposed to what is achieved by engagement?”

Dan Fuchs, a board member of Fossil Free California and CalPERS member, said he thinks both CalPERS and CalSTRS, the state’s second-largest pension fund, should divest because oil and gas companies are no longer stable investments.

“In the medium and long term, it’s going to be a bad investment,” Fuchs said.

Despite its opposition to divestment, CalPERS has taken other measures to insulate the nearly $600 billion fund from the impacts of climate change, which include taking steps to put a significant amount of money behind more sustainable investments.

During Monday’s investment committee meeting, CalPERS staff provided an update to the fund’s climate action plan. The sustainable investment team reported that CalPERS had invested $60 billion in climate solutions and was on track to reach the $100 billion investment pledge by 2030.

Rather than pulling its investments in oil and gas companies, CalPERS staff said the fund continues to use its power as a shareholder to engage with companies and encourage them to pursue sustainable practices, such as adopting net-zero emission plans.

“Forced divestment is a blunt instrument that silences our voice and leads to costly, unintended, and often counterproductive outcomes,” reads CalPERS’ divestment policy. “For all the good intentions of the divestment movement, it’s important to think through what is gained or lost when politics and ideology encroaches on investment decisions.”

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