State May Ask Firms to Use ‘Valdez’ Rules

A state resolution proposed on Tuesday asks businesses to adopt an environmental code of conduct if they want California’s two biggest pension funds to invest in them.

The Public Employees Retirement System and State Teachers Retirement System would be asked to consider companies’ ecological track records before investing money in them, under the resolution introduced by state Sen. Gary K. Hart (D-Santa Barbara) and sponsored by Democratic Controller Gray Davis. The two funds have total assets of about $85 billion.

The pension funds would be asked to assess whether companies comply with the so-called Valdez Principles, a 10-point environmental agenda for corporations formulated by the national Coalition for Environmentally Responsible Economies, or CERES, after the Exxon Valdez oil tanker spill in Alaska last year.

By adopting the code, the companies would agree to protect the biosphere, conserve natural resources, reduce waste and include an ecologist on their boards.

“We must encourage the development of an ‘environmental ethic’ in corporate America. Americans will not accept pollution in the name of profit,” said Davis, a trustee for both pension funds.

Davis said one of the pension funds--PERS--already has agreed to ask 27 major companies it invests funds with to state how their policies compare to the Valdez Principles.

So far, he said, eight companies have agreed to the plan: Aetna, Amoco, Chevron, Eastman Kodak, Mobil, Oryx Energy, Texaco and Union Carbide.

“Shareholder activism is something we feel more confident we can get bipartisan support for (in the Legislature) than a divestiture policy,” said Mary Raftery of California Public Interest Research Group, which supports Hart’s legislation.