CalPERS Calls on the Auto Industry to Defend Their Lawsuit against California Greenhouse Regulations

Business Wire, Dec 13, 2004

SACRAMENTO, Calif. -- The California Public Employees' Retirement System (CalPERS), concerned with the auto industry's decisions to file a lawsuit rather than comply with California regulations calling for cleaner cars, has asked its staff to invite the auto companies to come to Sacramento to explain their reasoning.

The CalPERS Board voted to spearhead a meeting with auto industry executives and its fellow pension fund the California State Teachers Retirement System (CalSTRS) as soon as possible in an effort to persuade car companies to do what is best for shareowners and California.

"Auto makers should be using available clean technologies rather than fighting the inevitable," said Sean Harrigan, President of CalPERS Board of Administration. "Shareowners are better served if auto manufacturers use shareowner dollars to comply with California's regulations. It is in the best interests of the auto industry's long-term viability, their competitiveness, and the interests of their shareowners."

CalPERS owns approximately $832 million of stock in auto manufacturers. Fund officials have said that they are prepared to further push on auto makers if they continue to fight against California's regulations.

"We are prepared to aggressively engage companies on this issue, including enlisting other investors in our efforts, pursuing proxy battles and filing an amicus brief," said Rob Feckner, Chair of CalPERS Investment Committee.

In 2002, California enacted legislation authored by Assembly member Fran Pavely that requires a significant reduction in vehicle emissions sold in California. The regulations set by the State's Air Resources Board require new cars to meet standards in 2009. The rules provide for a 30 percent reduction in greenhouse gases by 2016.

In related actions, CalPERS Board voted to reduce energy consumption in its $8.7 billion core real estate portfolio by 20 percent over the next five years.

The initiative is aimed at achieving stronger returns that would come with added benefits of lower energy consumption, a cleaner environment, and more jobs.

CalPERS core real estate portfolio includes investments in retail, apartment, industrial and office properties.

CalPERS is the nation's largest public pension fund with assets of more than $177 billion. The System provides retirement and health benefits to more than 1.4 million State and local public employees and their families. For more on CalPERS visit www.calpers.ca.gov.