‘CalPERS will not be silenced’ pension fund CEO warns Exxon Mobil

Presenting her report to the CalPERS board, Frost used the opportunity to highlight the case of Exxon, which had announced in January that it was taking two of its shareholders to court.

Her comments come days after the Californian pension fund, which manages some $462.8bn in assets has confirmed that its chief operating investment officer Michael Cohen has been appointed as chair of the Steering Committee for the investor coalition Climate Action 100+.

Frost was keen to stress that shareholder activism has booked significant progress. In the six years since the inception of Climate Action 100+, more than 70% of companies on the group’s focus list had adopted net zero targets and almost all had board committee oversight of climate risks and opportunities, she stated.

Having said that, she acknowledged that the group now faces significant pushback. “What doesn’t work is a powerful global company that seeks to punish shareholders for speaking out” she warned.

Frost drew the board’s attention to Exxon’s decision to take shareholders Arjuna Capital and Follow This to court for filing a climate resolution. She deplored that the company had persisted with the case, even though the shareholders had withdrawn their resolution.

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“The long-term repercussions of silencing shareholders should concern everyone. So let me be clear, CalPERS will not be silenced. We will not be silenced when doing what is right to provide long-term investment returns for our members and we will not be silenced in our call for more information and more ways to assess the risks of climate change” she warned.

Fighting complacency

Frost also addressed the fact that three of the world’s largest asset managers had recently either exited or scaled back their membership of the investor coalition.

“Not only are we fighting a race against the clock, we are also sadly fighting in some corners a creeping sense of complacency. This is not a time to be complacent” Frost argued.

"In recent weeks some influential investors have decided that they no longer want to be part of a global coalition. Why? We can’t really know for sure, perhaps it is the constant bombardment of misinformation or political pressure that is giving these investors pause about staying the course and finishing the work” she said.

“We have listened to the institutions that followed a different path, we can’t speak to their decisions because we see things differently. What we can speak to is the amazing strength in numbers and assets under management that helps the voice of ClimateAction 100+ to be heard” she stressed.

Frost’s comments come as Net Zero Investor revealed that Exxon Mobil has successfully fended off another shareholder resolution at its upcoming AGM on 29 May, leaving no progressive climate resolutions to be put to vote. Some shareholders, including $26bn Wespath Benefits and Investments Fund are now calling for a vote against the Exxon board.

CalPERS has been approached by Net Zero Investor but stated that it does not disclose voting intentions ahead of AGM’s. It will release how it has voted after the meeting of shareholders.

Push for divestment

The Californian pension fund has been targeted by climate activists and pension fund members with calls to divest from fossil fuels. The two Californian Systems are holding some $15bn in fossil fuel assets, according to climate campaigners. Over the last two years, the Californian State Assembly has discussed Bill SB-252, which would have forced both system to divest from fossil fuels, though the bill had been shelved last year.

CalPERS CEO Marcie Frost has recently spoken out against divestment from fossil fuels, arguing that this was against the fund’s fiduciary duty.

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