CalPERS board members voice concerns about investing in Exxon after testimony from beneficiaries

Monday's protest in front of the Western States Petroleum Association Offices after advocates occupied the lobby, marching, chanting and singing songs. Photo by Dan Bacher. | 

By Dan Bacher | 

SACRAMENTO –  On Monday, March 18, members of the CalPERS Board of Directors voiced serious concerns about continuing to invest in Exxon after the oil company sued shareholders who brought forward a climate resolution. 

The directors’ comments followed testimony from CalPERS’ beneficiaries and a large rally and press conference with unions, community and environmental groups outside CalPERS’ Downtown Sacramento headquarters.

The day's actions also included a 30-minute occupation by activists of the lobby of the Sacramento headquarters of the Western States Petroleum Association (WSPA, the largest and most powerful corporate lobbying group in Sacramento, after the rally and press conference.

“I don't think engaging with [Exxon] will work,” said Theresa Taylor, CalPERS President. “ I think we need a plan...To say that we are very disappointed [is not enough]...Our members were just in here talking about how important this is to them. We have to be more adamant about this…We agree with our 2 million members, those types of comments are what we need to hear [from CalPERS staff]. 

“All the work we have done for 20 years is being pushed back on...I think we need a plan and that plan needs to include whether or not we keep these companies in our fund,” she added.   

The testimony and protests took place as ExxonMobil is suing two shareholders in an attempt to block their shareholder proposal urging the company to accelerate the reduction of greenhouse gas emissions. This type of legal action is extremely rare, according to advocates.

The Interfaith Center on Corporate Responsibility, representing investors and institutions with some $4 trillion in total assets, noted that this type of legal action is extremely rare and is a “serious threat to shareholder rights and a clear message that the company is seeking to shut down any debate by its shareholders on actions needed to address climate risk.”

“Instead of making progress it almost appears like we are going backwards because now stakeholders are getting sued,” pointed out Frank Ruffino, State Treasurer Designee at CalPERS. “Even Pope Francis said stop it. Exxon, that is not nice, withdraw your lawsuit and that has not worked either, by the way. Not even the holy intervention seems to work with Exxon at this point.” 

Ramón Rubalcava: “This is basically an attack on our work”

Ramón Rubalcava, Board Member, argued, “We cannot underestimate this Exxon lawsuit. This is basically an attack on our work…and ESG as a principle...We have done the right things: We have the sustainability investment, we have the labor principles, we are revisiting the responsible contractor policy – CalPERS has been a leader on many initiatives, even way before my time.”

“We applaud that, but we have to continue to be vigilant. This is a new situation that could be precedent-setting – these attacks on ESG, governance, human capital and how we handle climate issues,” he concluded. 

In response, Drew Hambly, CalPERS’ Investment Director, noted that Exxon generally files its proxy with the SEC in mid-April. Hambly said that CalPERS investment staff planned to engage with Exxon at that time. He also pointed out that staff had talked to some companies since the Exxon lawsuit “to remind them that we don't think it is particularly useful for companies to be suing the people who provide their capital.” 

Multiple CalPERS beneficiaries testified on March 18 in front of Board members after rallying in front of the CalPERS Office and occupying the lobby of the WSPA headquarters. They called on the fund to exit Exxon, given the company’s actions and the risk continued investment in the company poses to retirement security.  

Bill Jackson, a CalPERS beneficiary, Oakland resident and member of the community organization ACCE, testified before the Board on Monday, as well as at the rally.

“I know about the first hand effects of oil drilling and refining in our state. One afternoon about ten years ago the air where I lived then grew thick with smoke. I knew it was the Chevron oil refinery. After the fire more than 15,000 people needed medical treatment for respiratory problems,” Jackson explained.

“Now another oil company, this time Exxon, is suing their own shareholders. Exxon's lawsuit seriously threatens shareholder rights. Exxon is essentially seeking to silence its investors. CalPERS has a lot of power when it comes to the companies they choose to invest in. I am pleased that the Board of Directors took the time to listen to members and consider the effects these investments have not only on retirees like me, but many generations to come,” noted Jackson.

“The CalPERS Board of Directors raised important questions about the actions of Exxon and showed a deep commitment to solid principles that have the systemic benefit of mitigating the negative effects of climate change and protecting the retirement security of millions of Californians,” said Allie Lindstrom, a senior strategist with the Sierra Club. “Barring a swift exit from Exxon, if CalPERS is interested in preserving the engagement process, staff must escalate their strategies: vote out directors and refuse to purchase bonds from Exxon or other companies that expand fossil fuel production until a credible transition plan is produced.”   

“From a finance perspective it just doesn’t make sense to keep investing in fossil fuel companies,” stated Tachina Garrett, a leader of the community group ACCE, at a press conference in front of the CalPERS headquarters. ACCE is an anchor organization of California Common Good. 

“Not only is Exxon’s stock price weak and California is suing the company and other major oil companies for decades of deception, Exxon is now taking aggressive action against shareholders trying to raise their voice through legitimate and proper channels,” Garrett concluded.

Big Oil spent $25.4 million on lobbying in CA in 2023

For many years, the Western States Petroleum Association, Chevron and the oil companies have exerted enormous power over the California Legislature, Governor’s Office and the state regulatory agencies.

However, Big Oil’s grip on California politicians has begun to slip over the past few years as the Newsom Administration has stopped approving fracking permits and has approved decreasing numbers of new oil drilling permits in California, due to intense pressure by a coalition of indigenous groups, climate justice advocates, community groups, labor unions and conservation organizations.

The oil and gas industry spent more money on lobbying in California in 2023 than any other year on record besides 2017. Big Oil spent $25,445,606 on lobbying in California in 2023 and $25,445,606 in 2017, according to the research team at Sunstone Strategies in their “Crude Truth” newsletter.

The group analyzed the California lobbying filings of every registered oil company in California, in putting 2023 trends into the context of industry lobbying for the past 20 years dating back to 2004. While in an earlier report on oil spending I used the raw data on fossil fuel spending from the filings on the California Secretary of State’s website, the newsletter used a slightly different methodology.

“Topping the lobbying spending charts in 2023 was Chevron, the second biggest oil producer in the state and the leading crude oil refiner. Trailing at number two: its trade association, the Western States Petroleum Association (WSPA),” wrote Sunstone Strategies.

“The two combined spent $18.1 million in 2023 — more than 71% of the industry’s total $25.4 in expenditures for 2023. Aera Energy, California’s top oil producer and a former joint venture of Exxon Mobil and Shell, placed in a distant third for 2023 lobbying spending,” they said.

However, in the fourth quarter, “WSPA and Chevron exchanged the number one and number two spots as the top lobbying spenders. Their expenditures totaled $2.8 million, accounting for over 60% of Big Oil’s quarterly spending total. Trailing in third was ExxonMobil, spending over $243,000 in lobbying for the quarter.”

The report also revealed that the state’s five major refiners, including Valero, PBF Energy, Marathon Petroleum, and Phillips 66, spent over $2.5 million on 2023 lobbying and influence activities.

Since 2009 I have documented how WSPA and the oil companies wield their power in 8 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups; (5) working in collaboration with media; (6) sponsoring awards ceremonies and dinners, including those for legislators and journalists; (7) contributing to non profit organizations; and (8) creating alliances with labor unions, mainly construction trades.

At the helm of the Western States Petroleum Association is President and CFO Catherine Reheis-Boyd-Boyd, the former chair of the Marine Life Protection Act (MLPA) Initiative to create faux “marine protected areas” in Southern California at the same time that she was pushing for new offshore drilling in state waters. 

In one of the ultimate ironies in California “green” politics, the state’s “marine protected areas” are still not protected from offshore oil drilling operations. A bill to protect just one marine protected area, the Vandenberg State Marine Reserve, from offshore drilling failed to pass through the Legislature in 2014, while another bill to stop new offshore drilling in state waters failed to get enough support to pass through the Legislature in 2023 and 2024.

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