USA: Pension fund CalPERS drops for-profit prison companies from its portfolio
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Author: Alicia McElhaney, Institutional Investor
The California Public Employees’ Retirement System (CalPERS) has divested from two publicly traded prison companies — CoreCivic and Geo Group... CalPERS came under scrutiny back in June when Educators for Migrant Justice, a nonprofit group seeking to end family separation, started pressuring the pension fund to divest... “I want to stress that [CalPERS] making this decision is a huge blow to private prison companies,” said Emily Goldman, founder of Educators for Migrant Justice... “This shows that these issues are material to a company’s performance... Human rights abuses can affect a company’s bottom line."
... CalPERS’ chief of public affairs Wayne Davis noted that “it was not a divestment — it was an investment decision. Our CIO Ben Meng, who joined us in January, conducted a comprehensive review of our investments, including our benchmarks and indices. Based on that review, we removed 217 companies including CoreCivic & Geo Group.”... A spokesperson for Geo Group [said via email]... “These divestment efforts are misguided and based on a deliberate mischaracterization of our role as a long-standing service provider to the government, and ignore the fact that we have absolutely no role in setting criminal justice or immigration policies nor have we ever advocated for or against criminal justice or immigration enforcement policies."
Author: Educators for Migrant Justice
The California Public Employees’ Retirement System (CalPERS) has divested from for-profit prison giants, CoreCivic and GEO Group, over growing concerns about the material risks both companies’ systemic human rights abuses pose to their bottom lines. CalPERS is one of the world’s largest and most influential institutional investors and their move to cut their financial ties to CoreCivic and GEO Group sends a strong message to other investors that financial complicity in egregious human rights abuses is not an option.
CoreCivic and GEO Group have faced enormous backlash over their role in the ongoing migrant abuse crisis and their stock prices recently tumbled to two-year lows. At least eight major banks have publicly stated that they will not provide future loans to CoreCivic or GEO Group, and investment analysts - including MSCI, CalPERS’ index provider - have increasingly called both companies’ financial viability into question as a result... “This is a landmark move in the evolving standard of fiduciary duty” said Emily Claire Goldman, founder and director of ESG Transparency Initiative’s Educators for Migrant Justice campaign. “CalPERS’ decision aligns the US’ largest pension fund with some of its most progressive peers in their approach to environmental, social, and corporate governance (ESG) risks and fiduciary duty.”