A report released last week revealed that the Public Employees’ Retirement Association (PERA), Colorado’s pension fund for state workers, voted against 61% of environmental, social, and governance (ESG) resolutions proposed by companies it was invested in during the 2022 proxy season.
Proxy season, which takes place from April to June every year, is when publically traded companies hold annual shareholder meetings where shareholders like PERA can vote on company resolutions.
PERA provides retirement and other benefits to employees of more than 500 government agencies and public entities across the state. Members of PERA include state and city government employees, college professors, and state troopers.
Interest in ESG resolutions has increased in recent years; in 2022 there was a 20% increase in the number of ESG resolutions introduced at U.S. companies compared to 2021. In 2022 climate change and sustainability resolutions made up the largest percentage of ESG resolutions at 24%.
Last week’s report, titled “Colorado PERA’s 2022 Shareholder Votes Fail to Address Climate Change, Discrimination, and Human Rights” was released by 350 Colorado, an environmental advocacy group, and found that despite the increase in ESG resolutions PERA voted against them a majority of the time.
PERA has $2.2 billion invested in over 400 fossil fuel companies, despite calls from environmental advocates and PERA members to divest from climate change-causing companies. Fossil fuel production and consumption are significant contributors to global warming.
According to 350 Colorado’s report, during the 2022 proxy season, PERA voted on 32 resolutions relating to climate change and curbing emissions, voting ‘yes’ on only 12 of them. Sally Dowiatt, a retired teacher and PERA member, said these votes are unacceptable.
“As a retired teacher and PERA member I am appalled by the lack of moral backbone that my retirement organization has shown in their proxy votes on ESGs,” said Dowiatt. “Teachers and other public servants who are members of PERA do our jobs because we want a just and sustainable world for future generations. Yet the leadership of PERA has voted against measures that promote this world 61% of the time! Unbelievable!”
Spokespeople for PERA did not respond to a request for comment by the time this story was published. If a comment is provided this story will be updated to include it. However, PERA does grant the public access to its 19-page proxy voting manual, which references ESG resolution in the context of companies maintaining transparency in divulging greenhouse gas emissions and other data that might be relevant to investors.
As explained in the manual:
“Matters that come to ballot for shareholder vote encompass a broad range of issues that may have a material impact on long-term investment returns. These may be classified as environmental, social, and/or governance (ESG) factors. … The goal of PERA’s proxy voting activities is to exercise shareholder rights to encourage the alignment of corporate interests with long-term investor interests. … Therefore, PERA’s proxy voting practices will generally seek to encourage public companies to adopt operational and oversight practices expected to generate sustainable shareholder returns.”
A study from Corporate Knights, a Canadian magazine focusing on sustainability, found that PERA lost $2.7 billion over the last 10 years by not divesting from fossil fuels.
Giselle Herzfeld, 350 Colorado’s defunding climate disaster campaign coordinator, emphasized previous activist calls for PERA to divest from fossil fuel companies and to change its proxy voting procedures.
“Not only is PERA continuing to invest billions of dollars into the fossil fuel companies that are driving the climate crisis, but they are also refusing to use their shareholder power to push the companies they invest in in a more sustainable direction,” said Herzfeld. “We encourage all PERA members to call on PERA to align their investments with Coloradan’s values of a safe, healthy, and just future.”
Just one day before 350 Colorado released its report, Gov. Jared Polis (D-CO) signed into law Senate Bill 23-016 “Greenhouse Gas Emission Reduction Measures” which requires PERA to publish an annual climate risk assessment for their investments.
An earlier version of the bill included an amendment that would have required PERA to align their proxy voting guidelines with Colorado’s greenhouse gas emission reduction goals, but the amendment failed after opposition from some Democratic party legislators who accepted donations from the oil and gas industry while campaigning for reelection in 2022. Additionally, former PERA executive director Ron Baker — who was fired under undisclosed circumstances earlier this month — applied pressure on lawmakers to reject the amendment.
Colorado produces the sixth-most crude oil among U.S. states and the eighth-most methane gas. A study released last week found that air pollution from U.S. oil and gas production causes $77 billion in health impacts nationwide every year. The study provided a direct link between oil and gas operations and the communities surrounding them that have reported health impacts like asthma and chronic headaches for years. The study found that among U.S. states, Colorado is second in asthma exacerbations per million and sixth in total deaths due to oil and gas production.
