New Law Requires California Pensions to Divest all Turkish Assets

September 21, 2019 | ESG and Sustainability

New legislation bars California pensions funds from investing in Turkish assets.

Turkish assets are now barred at California pensions. This is because of Turkey’s refusal to acknowledge responsibility for the Armenian Genocide. This tragedy claimed the lives of about 1.5 million Armenians a century ago.

However, for funds and pensions, the new law brings to the fore a new aspect of Environment, Social, and Governance (ESG) practices.

Turkish assets are barred

Therefore, the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS) cannot invest in new Turkish assets. This ban will remain in place until 2025, or Turkey changes its stand, whichever is earlier.

CalPERS and CalSTRS must also jettison all Turkish assets within 18 months of the passage of the new law.

California home to a large population of Armenians

According to U.S. Census data, over 200,000 people of Armenian descent live in Los Angeles county. In April this year, thousands of people marched through Los Angeles. They demanded recognition of the killings of 1.5 million Armenians, 100 years ago, by the Ottoman Empire as genocide.

It may be noted that California has traditionally been a torchbearer for human rights.

CalPERS objects to the new law

Staff from the investment office of CalPERS wrote to the Board of Trustees in a memo. It suggested that the loss on the divestment of Turkish assets would have to be born by both employers and employees.

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