CalPERS Board Responds to Call to Drop Exxon
FOR IMMEDIATE RELEASE: Wednesday, March 20, 2024
Contact: Elizabeth Brennan, elizabeth@eabstrategies.com, 213-999-2164
CalPERS Board Responds to Call to Drop Exxon
Multiple Board members raised concerns about recent litigation launched by Exxon against shareholders.
SACRAMENTO – Following testimony from CalPERS’ beneficiaries and a large rally and press conference with unions, community and environmental groups outside CalPERS’ Downtown Sacramento headquarters, members of the CalPERS Board of Directors raised serious concerns about continuing to invest in Exxon after the oil company sued shareholders who brought forward a climate resolution.
Theresa Taylor, CalPERS President:
“I don't think engaging with [Exxon] will work. I think we need a plan…To say that we are very disappointed [is not enough]...Our members were just in here talking about how important this is to them. We have to be more adamant about this…We agree with our 2 million members, those types of comments are what we need to hear [from CalPERS staff]. All the work we have done for 20 years is being pushed back on...I think we need a plan and that plan needs to include whether or not we keep these companies in our fund.”
Frank Ruffino, State Treasurer Designee at CalPERS:
“Instead of making progress it almost appears like we are going backwards because now stakeholders are getting sued. Even Pope Francis said stop it, Exxon, that is not nice, withdraw your lawsuit and that has not worked either, by the way. Not even the holy intervention seems to work with Exxon at this point.”
Ramón Rubalcava, Board Member:
“We cannot underestimate this Exxon lawsuit. This is basically an attack on our work…and ESG as a principle...We have done the right things: We have the sustainability investment, we have the labor principles, we are revisiting the responsible contractor policy – CalPERS has been a leader on many initiatives, even way before my time. We applaud that, but we have to continue to be vigilant. This is a new situation that could be precedent-setting – these attacks on ESG, governance, human capital and how we handle climate issues.”
In response, Drew Hambly, CalPERS’ Investment Director, noted that Exxon generally files its proxy with the SEC in mid-April. Hambly said that CalPERS investment staff planned to engage with Exxon at that time, and he also noted that staff had talked to some companies since the Exxon lawsuit “to remind them that we don't think it is particularly useful for companies to be suing the people who provide their capital.”
Multiple CalPERS beneficiaries testified on March 18 in front of Board members. They called on the fund to exit Exxon, given the company’s actions and the risk continued investment in the company poses to retirement security.
“The CalPERS Board of Directors raised important questions about the actions of Exxon and showed a deep commitment to solid principles that have the systemic benefit of mitigating the negative effects of climate change and protecting the retirement security of millions of Californians,” said Allie Lindstrom, a senior strategist with the Sierra Club. “Barring a swift exit from Exxon, if CalPERS is interested in preserving the engagement process, staff must escalate their strategies: vote out directors and refuse to purchase bonds from Exxon or other companies that expand fossil fuel production until a credible transition plan is produced.”
Bill Jackson, a CalPERS beneficiary, Oakland resident and member of the community organization ACCE testified before the Board on Monday.
“I know about the first hand effects of oil drilling and refining in our state. One afternoon about ten years ago the air where I lived then grew thick with smoke. I knew it was the Chevron oil refinery. After the fire more than 15,000 people needed medical treatment for respiratory problems. Now another oil company, this time Exxon, is suing their own shareholders. Exxon's lawsuit seriously threatens shareholder rights. Exxon is essentially seeking to silence its investors. CalPERS has a lot of power when it comes to the companies they choose to invest in. I am pleased that the Board of Directors took the time to listen to members and consider the effects these investments have not only on retirees like me, but many generations to come.”
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California Common Good (CCG) is an innovative coalition of labor, community and environmental groups, anchored by the Alliance of Californians for Community Empowerment (ACCE), United Teachers Los Angeles and AFSCME 3299. CCG is advancing coalition campaigns for housing justice, workers rights and climate action, with an emphasis on the interests and needs of low-income and working-class communities of color. Central to our strategic approach is working to hold big corporations accountable to the common good.