The US state of California has passed a landmark bill requiring two of the country’s biggest pension funds to consider “climate-related financial risk” when making investment decisions. Senate Bill 964 requires the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) to identify climate risk in their portfolios and report on that risk to the public and to the legislature every three years. The first report is due before 2020. The two funds – which oversee $590 billion between them – must also report their portfolios’ carbon footprints and their progress towards meeting the goals of the 2015 Paris Agreement on climate change, as well as California climate policy goals. The bill is the first of its kind passed in the US, according to campaign group and co-sponsor of the bill Fossil Free California, and provides a statutory definition of climate-related financial risk.

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