They placed before the Investment Committee proposals for divestiture and oversight of investments, as well as implementation of internal adherence to the Valdez Principles. These proposals initiated by the Redwood Coast Teachers Alliance were substantially endorsed by the State Council and the Board of the California Teachers Association.
STRS is presently over-committed toward the goal of maximizing the return on investment, in this case teachers' retirement funds contributed from teachers' salaries and the taxpayer. Unfortunately, these public funds held in trust include billions of dollars of stock and bonds invested in socially or environmentally irresponsible corporations that are doing tremendous harm to our society and planet.
They requested that STRS divest from five corporations, with Exxon heading the list, both for obvious environmental mismanagement and for the arrogance displayed by the corporation in the wake of the Valdez spill. The remaining four have extensive operations on the North Coast. WMI, Waste Management Incorporated, set records for penalties and settlements for pollution violations at dump sites, incinerator stacks, deep-well injections, and water contamination. The three remaining firms are multi-national industrial timber corporations whose operations are making an irreversible and substantially negative environmental impact on the Redwood Coast: while both Georgia-Pacific and Maxxam continue to harvest timber at a dangerously high rate in order to finance costs incurred as a result of takeover moves, Louisiana-Pacific, in a move typical of its mode of operation, recently "mistakenly" axed all but 12 trees in a grove of old-growth redwoods rather than sell the land to the Save the Redwoods League.
These are not the types of investments many teachers care to hold. Many teachers cheered when, in the wake of the Alaskan Oil Spill, the Investment Board of STRS adopted a Statement of Investment Responsibility (STRS Resolution No. 89-38) which claimed to ensure "that the Retirement System . . . does not promote, condone or facilitate social injury . . . [which includes] practices which are known to endanger the environment." After all, these instructors reasoned, this is the money of teachers the Board is investing; it should be put to uses compatible with that fact. If teachers do not invest in socially responsible companies, who will?
Instead, questionable investments abound in the State Teachers Retirement System's stock portfolio. These items are questionable not only in terms of "social injury," but also in the wisdom of holding such stock at all--stock, for instance, in companies whose short-term earnings demand liquidation of base capital (such as the overcutting of trees). Exxon, Georgia-Pacific, Louisiana-Pacific, Maxxam and Waste Management, Inc. have repeatedly violated the Valdez Principles. Teachers are concerned about providing examples of stewardship of our ecosystems; and as investors, teachers question the wisdom of placing their funds at risk in socially irresponsible companies with a record of destructive natural resource management which results in harmful ecological and community impacts.
The STRS Board was asked to respect the wishes of those whose money the Retirement System invests by immediate divestiture of the five stocks mentioned above--and a critical review of other stocks currently held by the System. Teachers, parents and students want investments teachers can be proud of. Responsible investments.
Pursuant to the STRS endorsement of Senate Concurrent Resolution No. 84 and the Valdez Principles, the Redwood Coast Teachers Alliance requested that the STRS Board implement the following recommendations:
1. Inclusion of the Valdez Principles in the existing criteria for responsible voting of corporate shares owned by the system.
2. Supporting, through the voting of proxies, corporate adoption of the Valdez Principles.
In addition, they urged the STRS to take a leadership role and to go beyond this well meaning resolution and implement the Valdez Principles throughout all aspects of the STRS. The delegation warned STRS Board not to point the finger at irresponsible corporations while their management has yet to fully make a good faith effort to implement these principles internally within the system. The delegates strongly recommended that the STRS Board adopt the Valdez Principles for the STRS and specifically begin to immediately implement the following actions pursuant to principles numbered 9 and 10:
1. Establish procedures to ensure that the board of directors and chief executive officer are informed of all environmental matters affecting the STRS and its employees.
2. Include on the board of directors a person qualified to represent pertinent environmental issues.
3. Establish a board committee on environmental affairs.
4. Conduct and make public an annual self-evaluation of progress in implementing the Valdez Principles and in complying with all applicable laws and regulations throughout the world.
For further information, tax-deductible contributions and/or offers of assistance, please contact Bob Whitney, Susan Van Dongen or Val Muchowski by phone or write: Redwood Coast Teachers Alliance, C/O Willits Environmental Center, 42 South Main Street, Willits, CA 95490, (707) 459-4110
Copyright Mendocino Environmental Center 2004
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