State pension funds have historically taken stands against controversial industries, like firearms and tobacco, sometimes divesting their investments to push companies to act. But in the opioid crisis, which has generated hundreds of lawsuits seeking to hold manufacturers and distributors accountable, the funds have mostly stayed on the sideline so far, Bloomberg News reported. Some of the biggest ones, including New York and California pension funds, hold investments in Endo International, the largest maker of opioids after privately held Purdue Pharma LP. Even in West Virginia, which has been racked by opioid-related deaths, the state pension fund has a $1.8 million equity stake in Endo. The opioid investments, to be sure, are tiny relative to the funds’ overall assets. And pension fund members may not know they are invested in the opioid industry. Many fund investments are held through indexes, which are passive vehicles, said Keith Brainard, research director for the National Association of State Retirement Administrators. The New York State Teachers’ Retirement System, which manages about $122 billion, holds $3.1 million in Endo stock, about 75 percent through passively held indexes, a spokesperson said. Funds including California’s and New York’s say they generally oppose divesting from controversial companies because it doesn’t change corporate behavior. Instead, they say they try to engage with management through activist measures. The California State Teachers’ Retirement System, CalSTRS, has been active with a group called Investors for Opioid Accountability, which represents 54 institutions. New York’s fund said it has asked opioid manufacturers to address potential financial, legal and reputational risks.
