California State Treasurer Bill Lockyer is planning a second firearm divestment proposal for the California Public Employees’ Retirement System meeting next month, according to Lockyer’s director of communications.
Last week, the California State Teachers’ Retirement System’s investment committee unanimously approved a divestment motion presented by Lockyer that prevents the retirement system from investing in firearms deemed illegal by the state of California. Lockyer sits on the boards of both CalPERS and CalSTRS.
The divestment proposal followed the massacre at Sandy Hook Elementary School, where 26 people – including 20 children between the ages of 6 and 7 – were killed by a gunman armed with a Bushmaster AR-15 rifle. The rifle was produced by an affiliate of Freedom Group, a Cerberus Capital Management portfolio company.
CalSTRS, a limited partner in the Cerberus fund used to acquire Freedom Group, released a statement indicating that it would review that investment and also assess its exposure to firearm manufacturers.
Cerberus, shortly thereafter, announced its intention to sell Freedom Group.
The retirement system’s decision to divest from firearms manufacturers was attributed to the $154 billion retirement system’s existing policy for mitigating environmental, social and geopolitical risks. The policy includes 21 risk factors, including one labeled “Human Health” that recommends managers consider “long-term profitability from business exposure to an industry or company that makes a product which is highly detrimental to human health”.
“Both [CalPERS’ and CalSTRS’] policies contemplate divestment from companies whose products can damage public health and safety,” said Lockyer’s director of communications, Tom Dresslar. “Hopefully PERS will go along.”
CalPERS did not respond to a request for comment at press time.