On April 25th, 2017, the California Senate Public Employment and Retirement Committee passed Senate bill 560 (SB -560) requesting CalPERS and CalSTRS, the two largest public pension funds in the US, to report annually on “the financial climate risks of [their] investments, including the alignment of [their] portfolios with the Paris Climate Agreement and California climate policy goals, the value at risk if these goals are achieved, and the exposure of the portfolios to long-term risks.
To be established in law in September of this year, the bill must pass both houses of the state legislature. But for now, the bill cleared the first critical hurdle.
The reporting requirements were directly inspired from the French Article 173, findings from the International Award on Investor Climate Disclosures, and 2° Investing Initiative’s response to the TCFD consultation.
At this first hearing, Senator Ben Allen, who introduced the bill, was supported by Philippe Desfossées, CEO of the French public pension funds ERAFP and Chris Weber from 2Dii, who both testified in front of the Senate committee (see video here). Furthermore, he also benefited from the support of the French insurer and climate disclosure award winner AXA, that shared its report showcasing the application of Article 173.
The bill is sponsored and supported by a number of environmental organizations, including the Center for International Environmental Law (CIEL), DivestInvest Network, Fossil Free California, Environment California, and 350.org groups in California.
The bill still needs to pass additional committees and floor votes in both the state Senate and Assembly before it goes to Governor Jerry Brown for signature.