COLORADO: Colorado’s Public Employees Retirement Association (PERA), which manages the pensions of half a million current and former state employees, and California state pension funds CalSTRS and CalPERS lost over $19 billion in returns by not divesting from fossil fuel stocks ten years ago, according to new analyses performed by media and analysis firm Corporate Knights. That works out to an opportunity cost of over $2,900 per PERA member. Based on analysis of public security filings over the past 10 years, Colorado’s $45 billion state pension fund (PERA) would have generated an estimated additional $1.77 billion in value, had the fund divested its fossil fuel stocks ten years ago. 

The study was commissioned by the Fossil Free PERA Coalition and supported by PERA members and beneficiaries, who raised the money for the study after the Colorado General Assembly voted in April of this year to not move forward with House Bill 1270, a proposal to require the state’s pension system to study the risks of its fossil fuel investments. The two-page bill would have directed PERA to hire an independent firm to assess its portfolio’s climate-related financial risk. 

To determine the financial impact of fossil fuel divestment for the pension funds, Corporate Knights retrieved the funds’ stock holdings, weights and valuations for each of the past ten years, then used publicly disclosed information to compare the actual investment returns of the equity portfolio with those of a fossil fuel-free version (no oil, gas or coal stocks). 

The reports also found that the percentage of fossil fuel stocks (by value) in publicly disclosed holdings for each pension fund shows a marked decline over the past ten years, due to general erosion in the relative value of fossil fuel stocks as compared to the rest of the market. The reports also highlight the fact that large fossil fuel companies pulled down overall performance – while technology, healthcare, retail and entertainment boosted performance. 

The general outperformance of fossil free investment strategies in recent years is due primarily to an accelerating energy transition, happening faster than investors expected. In September of this year, the global movement to divest from fossil fuel companies and invest in climate solutions announced a major milestone, as the total managed assets pledged for divestment have leapt from $52 billion in 2014 to more than $11.5 trillion today — a stunning increase of 22,000 percent. Over 1,110 institutions have now committed to policies black-listing some combination of coal, oil and gas investments. These include sovereign wealth funds, banks, global asset managers and insurance companies, cities, pension funds, health care organizations, universities, faith groups, foundations, and the entire country of Ireland.

In Colorado, Denver Mayor Michael Hancock announced this past spring that the City of Denver was divesting its $6 billion General Funds’ portfolio from fossil fuel investments. The University of California also recently announced divestment of its $83 billion pension and endowment funds, for “purely financial reasons.” Given the opportunity cost of not divesting, community members are escalating their demands, asking the trustees of these public funds why they aren’t heeding loud and clear market signals. 


*Full reports available here:


“As the union representing Colorado state employees, we are always concerned with issues that threaten our retirement security. It was reassuring to find in the Corporate Knights study that over the last 6 years PERA has made deliberate decisions to lessen its exposure to investments that are volatile, risky, or performing poorly. We remain hopeful that with our rapidly changing socio economic landscape,  PERA will continue to remain vigilant and strive to improve the diversity of its investment portfolio. We live in a time of extreme global market volatility, not only for PERA but all investors. Through the implementation of PERA’s new governance and disclosure policy, coupled with stakeholder engagement, Colorado WINS remains confident PERA is on the right path to once again provide a well funded retirement for our state employees.” – Dragan Mejic, Colorado WINS Executive Board

“As long as PERA’s money remains invested in the fossil fuel industry, that investment supports an industry that has willfully denied its role in climate change, accelerating today’s climate crisis in favor of profits. For the sake of drowned Pacific islands, migrants fleeing drought, and future generations’ lives, PERA must divest from fossil fuels. The Corporate Knights study makes that easier by showing they have billions of dollars to gain as well.” – Devon Reynolds, Colorado PERA member, University of Colorado Graduate Student Employee  

“PERA owes the same fiduciary duty to members retired today and members retiring 30 years from now. What this new information makes clear is that everyone’s interests are aligned when it comes to fossil fuel investments. It’s time to move our money to safer investments, both for better returns today and a viable future for PERA members of my generation and beyond.” – Bobbie Mooney, Fossil Free PERA Spokesperson & Colorado PERA member

“The results of the study shouldn’t surprise anyone, including PERA. The economic outlook for fossil fuels has been weak for years now. As a fellow Coloradan, I hope PERA pays better attention moving forward, and invests with these risks in mind. People’s retirements are on the line.” – Andrew Rodriguez, CEO + CIO, Change Finance, PBC

“We have known for many years that holdings of fossil fuel companies are morally and ethically unsuitable for most investors. We now see that those investments are also detrimental to the risk-adjusted returns of a diversified portfolio like PERA. Combine these factors, and the investment case for fossil fuels collapses.  The only question is who will be the last one to come to this realization and what price they will pay for it.” Daniel Carreno, Change Finance, PBC

“Institutional investors literally have the power to make or break the future. Money lies behind every decision to expand or contract the fossil fuel industry, to slow or accelerate the clean energy transition,” said Clara Vondrich, Director of Divest Invest. “There is no more time for shareholder engagement with the fossil fuel industry that is digging and burning us past climate tipping points of no return. It’s time to divest. What side of history are you on?”

Corporate Knights Study Methodology Notes:

Based on quarterly data retrieval of each funds’ equity portfolio as disclosed in security filings (security names, identifiers, number of shares and market value) provided by S&P Capital IQ from July 1, 2009 to June 30, 2019.  Two scenarios were plotted using public data: one calculated the performance of the regular portfolio including fossil fuel stocks and the other calculated the performance of the fossil free portfolio, which excluded all stocks in the GICS Sector = Energy and other stocks generating 10% or more revenue from from extracting, refining, burning or transporting thermal coal, oil or gas. The value of the fossil fuel stocks was re-invested in the remaining stocks proportionate to their market value. The performance comparison period ran for 40 quarters from July 1, 2009 to June 30, 2019. Returns were compounded daily by S&P Capital IQ and portfolios were re-balanced each quarter according to public filings accounting for fund inflows and outflows. Note: the calculations were based solely on equities disclosed through security filings, and likely understate the true opportunity cost of not divesting fossil fuel stocks for the entire equity portfolios.