An article in Pensions & Investments reports that in the wake of the school shooting in Newtown, Connecticut, the California State Teachers Retirement System (CalSTRS) has approved the divestiture of holdings in two gun manufacturers that make weapons that are illegal in California.
Use of a pension fund’s investments to further nonfinancial purposes, sometimes referred to as social investment or socially screened investment, has a long and controversial history. Previous examples have included divestment of stocks in South African companies during apartheid, and divestment of tobacco stocks. A discussion of the history and the legal issues involved can be found at this link.