CalSTRS Turns the Tides of History and Adopts Historic Divestment Proposal: Will CalPERS Follow Suit?
By State Treasurer John Chiang
In 2017, alone, there were 346 mass shootings in the U.S.
In just the first four months of this year 103 people have been killed and 309 wounded in mass shootings in America.
With Congress and statehouses either unwilling or unable to pass sensible policies to prevent our schoolyards, work sites, and places of worship from becoming killing fields, we must take the battle to where the money is.
And when the NRA tells us that we are no match for the torrent of money they can rain down to block any and all reform, the response must be, “We will become the storm!”
I have called upon our nation’s largest institutional investors to use the power of their purse strings to prevent another American — another one of us — from having to bury a child, a sibling, or a spouse.
BlackRock, Bank of America, and CitiGroup are to be commended for already moving to adopt policies that pull back or prohibit investing in, lending to, or financing the mass proliferation of military-grade assault weapons for civilian use. My office, meanwhile, has been working with at least three additional Wall Street investment banks on similar policy changes.
Months ago, I also appealed to our state public pension systems to stop using taxpayer and public employee pension funds to support the sale of banned military-grade assault weapons. And on May 9, the California State Teachers’ Retirement System’s (CalSTRS) became the first public pension plan to answer the call.
What do I mean by “banned military-grade assault weapons?”
As we have seen far too often, the weapon of choice in many mass shootings is a military-style assault rifle, like an AR-15. Californians, through their elected representatives, have banned the sale or possession of these unlawful firearms.
By adopting the progressive three-step divestment policy I proposed, the nation’s second largest pension fund will move down the path of no longer investing in a deadly product considered such a public health threat that if any Californian were caught selling or buying one of these arms today, it would earn that person prison time.
The nation’s largest teachers’ pension fund will no longer be plunking teacher pension contributions into financing the proliferation of weapons that are killing the very educators that CalSTRS was chartered to protect and advance the prosperity of. This has profound significance since seven out of ten mass shootings occur at schools or businesses.
How does the new policy work? It directs CalSTRS’ staff to engage dealers of illegal firearms using a three step process aimed at persuading them to alter their business practices. Those three progressive steps include:
1) Engaging with wholesale and retail sellers of assault weapons banned in California to persuade them to end such sales.
2) If sales continue or a company declines to engage with CalSTRS, the pension fund will use its shareholder proxy powers to cast votes against retaining the company’s entire board of directors.
3) If the first two steps fail, CalSTRS will actively develop and pursue divestment options.
We are at a pivotal time in the nation’s debate over gun violence. The scourge that puts military-style weapons designed only to kill other people in the hands of civilians is weakening.
Major American brands, ranging from Dick’s Sporting Goods, Enterprise Holdings, and United Airlines, to L.L. Bean, Best Western, and Walmart are severing their ties with the NRA or changing their gun sales policies.
Gun company stocks are plummeting with the recent major slump in sales. Smith and Wesson, one of America’s iconic gun manufacturers, slashed manufacturing jobs by 25% last year and its last quarter sales plummeted by 39%. Meanwhile Remington, another iconic name in American gun history, has filed bankruptcy.
The youth of our nation, led by the courageous and inspired students of Marjory Stoneman Douglas High School have helped prepare this moment for us. Marches and protests have elevated and roiled the conscience of the nation. It is a moment that has arrived at too great a price.
But through this divestment effort, at least, CalSTRS is now doing its part to prevent these hideous weapons from continuing to be used in the cruel and barbarous murder of our friends, our neighbors and our loved ones.
Join the “divest for our lives” movement by:
-Checking your personal investments, including your 401(k), to see if you are investing in the manufacturers or sellers or banned military-grade assault weapons.
-Show your support for divestment by using #DivestForOurLives on social media.
-Write and call the board members who lead the California Public Employees’ Pension System (CalPERS) — the nation’s largest public pension fund — who recently voted to prioritize gun profits over people.
The following article is based on remarks delivered by California State Treasurer John Chiang at the CalSTRS Board Meeting on May 14, 2018 in Sacramento, Calif. To watch this meeting, click here.