A Sign of Sense in California?

Power Line Blog

What’s this? An actual expression of common sense in California? Yes, it has actually happened.

"CalPERS, the public employee retirement system in California, has one of the largest investment portfolios in the world (0ver $350 billion), though it is still not large enough to fulfill its pension obligations. Naturally being a political plaything, several years ago CalPERS board decided that it should use its investment clout on behalf of “social investing,” which of course means in plain speaking “lower return investing.” By its own estimate, CalPERS decision to exit tobacco stocks back in the late 1990s reduced portfolio returns by $3 billion from 2001 to 2014.

"It seems CalPERS has decided to beat a retreat from social investing. Barron’s reports today:

A funny thing happened recently in the left-leaning Golden State. In a board election last month, members of the California Public Employees’ Retirement System, or Calpers, the biggest pension fund in the nation, threw out their president and gave ESG investing a bloody nose.

ESG is the increasingly popular asset-management style that applies environmental, social, and governance standards to screen potential investments. Following this approach, an investor might avoid certain stocks or push shareholder proposals to modify corporate behavior. Unfortunately, they often favor hard-to-define social objectives rather than the narrower goal of maximizing shareholder returns.

. . .  "P.S. How long, however, will it be until California politicians demand that CalPERS divest from corporations that don’t meet California’s new legal mandate that half of their boards of directors must be women?  I give it one year or less."