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FOR IMMEDIATE RELEASE |
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State
Rep. Babette Josephs |
  
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Josephs pushes Pennsylvania toward divestment of state pension funds
HARRISBURG, June 24 – The Pennsylvania House of Representatives is poised to vote on legislation that would require the Commonwealth to pull its state pension investments out of companies that do business with the governments of Sudan and Iran.
The proposal was offered by Rep. Babette Josephs, D-Phila., who successfully amended it into a bill (H.B. 1086), introduced by Rep. Josh Shapiro, on the House floor. Josephs said she and Shapiro worked closely together to draft the proposal that ultimately replaced H.B. 1086.
The amended bill calls for the withholding of Pennsylvania's pension fund investments from foreign companies that are directly or indirectly helping the Sudanese government perpetuate genocide and the Iranian government sponsor terrorism. U.S. companies are already prohibited from this.
"Investing in such irresponsible companies not only can pose immediate risks to Pennsylvania's funds, it also can threaten their long-term value," Josephs said. "The Commonwealth has a fiduciary responsibility to its citizens to ensure that investments made for our public funds enhance the bottom line for their beneficiaries, and socially responsible investing will help do that."
The proposal, which is similar to Josephs' legislation (H.B.1140) the House passed last summer, uses an approach called the targeted divestment model. Only if a company refuses to change its behavior in response to shareholder engagement would the model call for divestment from that company.
Similar divestment strategies helped to bring about the end of apartheid in South Africa.
"We must send these governments and companies a message that we do not tolerate genocide nor do we tolerate terrorism, and this legislation will hit where it will be understood the most -- on the economic level."
Earlier this year, the state Treasurer's Office began a new investment strategy framework for state funds, which includes taking a company's business ties into consideration; however there is no state law that mandates divestment. Josephs said action on the legislation would make that strategy permanent.
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