The California State Teachers’ Retirement System, or CalSTRS, the second largest public pension fund in the U.S., announced it plans to get rid of the stock it owns in companies that make firearms.
“After deep analysis, great study, we believe the right approach was to begin to unwind these positions immediately,” says Harry Keiley, a teacher who heads the fund’s investment committee.
The CalSTRS portfolio is worth more than $150 billion, and Keiley estimates stock in firearms manufacturers amounts to $11 or $12 million.
CalSTRS moved quickly. It hasn’t been a month since the shooting at Sandy Hook Elementary School. But David Webber, who teaches at Boston University Law School, says divestment can take a long time.
“Certain funds I know that divested from tobacco, it took them years.”
Fund managers have a duty to protect their members’ investments. They have to keep that in mind whenever they buy – and sell. But they’re often asked to consider something else: the social good.
There have been campaigns to divest from fossil fuels, from Israel, from companies that made nuclear weapons, and according to David Meyer, a political science professor at the University of California, Irvine, the results have been mixed.
“So-called social investing started almost 100 years ago,” he says. Some investors thought it was immoral to profit from companies that made alcohol. But it’s still on the shelves.
In the 1980s, the focus was on South Africa.
“The people who are running South Africa now, the elected government, give a lot of credit to the international divestment movement,” says Teresa Ghilarducci, the Bernard L. and Irene Schwartz Chair in Economic Policy Analysis at The New School for Social Research.
She says that movement gave black South Africans a big boost when they really needed it. Advocates of more gun control hope that what CalSTRS has done will catch on, and this divestment campaign will do the same.