(Reuters) - The California State Teachers’ Retirement System decided on Wednesday to publicly engage retailers of military-style assault weapons in the wake of public outcry over mass shootings, as opposed to immediately reducing investments in these companies.
The decision by the nation’s second largest pension fund came after California State Treasurer John Chiang urged CalSTRS to use “the power of its purse strings” and “deny weapons of mass carnage to another killer stalking our innocent loved ones.”
The pension fund has already divested from firearms manufacturers, but the board said that with retailers, it preferred to take a high-profile engagement strategy.
The plan calls for the fund to hire two new positions devoted to actively engaging retailers. It allows the board to reconsider divestment if it “fails to achieve an acceptable outcome,” but did not specify what would be considered unsuccessful engagement.
The plan would prioritize “a public communication plan to highlight areas of firearm concern and applaud responsive companies.”
“Unlike other CalSTRS engagements, where our staff practices quiet diplomacy, this plan advances a more public approach, to leverage the public pressure that has been mounting in this country in response to recent tragic gun violence,” said Harry Keiley, CalSTRS’ Investment Committee Chair. “We encourage other institutional investors to consider conducting similar activities.”
CalSTRS’ decision follows a vote by the California Public Employees’ Retirement System board in March to not divest in assault rifle retailers and wholesalers, saying the move would do little to reduce gun violence.
Both proposals were pushed by Chiang, who is running for governor of California.
CalSTRS’, in documents discussed on Wednesday, noted exposure to retailers and wholesalers of assault-style rifles exceeds $420 million, the majority of it passively held in an investment in Walmart Inc (WMT.N).
However, two weeks after February’s mass shooting at Marjory Stoneman Douglas High School in Florida, Walmart amended its firearms sales policy by raising the minimum age for purchasing firearms and ammunition to 21 years. Walmart ended sales of modern sporting rifles, including the AR-15, in 2015, the company said in a February statement. It doesn’t sell handguns, except in Alaska.
The CalSTRS board on Wednesday listened to statements from about a dozen members of the public, including teachers, parents, and family members of victims of mass shootings, who called on the board “to be an agent of change” by supporting divestment.
In 2013, CalSTRS divested from publicly traded companies that manufactured firearms after the mass shooting at Sandy Hook Elementary School.
Following the massacre at Marjory Stoneman Douglas High School, weapon manufacturers, too, have been under increasing scrutiny to acknowledge a growing public discourse over weapon sales to the public.
Sturm Ruger & Co (RGR.N) executives said on Wednesday a majority of investors backed a shareholder resolution calling for the company to produce a safety report, a rare rebuke to management and the first time in memory such as resolution passed at a publicly traded gunmaker.
The pension fund’s total portfolio reached $222.5 billion as of March 31.
Reporting by Robin Respaut in San Francisco; Editing by Daniel Bases and David Gregorio