Earlier this month I watched Tom Steyer make a clear case for divestment from fossil fuels before the California State Teachers Retirement System Board in Sacramento. The video of the presentation is now available and linked below.
Steyer laid out five criteria for evaluating divestment:
1. Does the group of companies cause harm to society?
2. Is there a realistic replacement for the product or service they provide?
3. Is it a long-term asset appropriate for large long-term pension funds?
4. Does engagement with management offer any prospect of improving the investment?
5. What is is the financial impact to the retirement portfolio?
Steyer showed that fossil fuel investments fail in all five areas.
He provided data indicating that fossil fuel investments have actually performed worse than other investments. He also questioned the value of existing fossil fuel companies, arguing that their reserves will become stranded assets as the world addresses climate change by reducing fossil fuel use.
On the issue of whether the fossil fuel companies can reform themselves, he said that if you look at the annual reports of the petroleum companies, it is clear they are very reluctant to change their strategic thinking about their long term role.
Steyer said that alternative energy is growing rapidly in California and he expect there to be over 500,000 clean energy jobs in the state by the end of the year: "We are seeing something very good happening here in terms of the state push for clean energy."
Steyer's initial comments to CalSTRS are in the first 15 minutes or so of the video, followed by Q&A with CalSTRS board members.