Illustration: Aïda Amer/Axios

California’s state senate on Thursday overwhelmingly approved a ban on fossil fuel investments by the pension funds representing state employees and state teachers.

Why it matters: CalPERS and CalSTRS are the country’s two largest state pension systems, with around $768 billion in combined assets under management.

Details: The bill blocks CalPERS and CalSTRS from investing in the 200 largest, publicly traded fossil fuel companies.

It also requires eventual divestment of existing positions, although there’s some fiduciary flexibility written into the legislative language.
The bill still must be approved by the state assembly and signed into law by Gov. Gavin Newsome. Bill proponents appear confident that both will happen.

Behind the scenes: The boards of both pensions had opposed the bill.