Document Type

Thesis or dissertation

Date of this Version



Christopher Geczy


Admist widespread debate on the necessity for pension fund oil divestments, I show that U.S. public pension fund returns are positively correlated with crude oil returns. I shed light on alternative options to divestment as funds tend to hold relatively smaller positions in oil-sensitive investment and carbon offset prices may not be as costly as anticipated. My evidence on the California Public State Employees’ Retirement System (CalPERS) reveals that costs for offsetting carbon exposure can be as low as US$10.71 in the case of small cap oil investments. This draws attention to the fact that divestment is not the only method through which pension funds can mitigate climate risk. These results imply that comprehending their exposure and sensitivity to oil returns is a vital task for U.S. public pension funds to best react to the calls for oil divestment while safeguarding their fiduciary duty to produce stable, low risk returns.


investing, ESG, oil, impact investing, pension fund investment strategies



Date Posted: 24 May 2023


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