CA SB1173

Prohibits the Public Employees' Retirement System and State Teachers' Retirement System from making new investments or renewing existing investments in fossil fuel companies (the 200 largest publicly traded companies by proven reserves).

Requires divestment of all fossil fuel investments by July 1, 2030, with suspension possible if market conditions materially deteriorate, and suspension expires January 1, 2035.

Mandates annual reports to the Legislature and Governor starting February 1, 2024, listing divested companies, remaining holdings, and analysis of transitioning to alternative energy sources.

Defines fossil fuels as petroleum oil, natural gas, and thermal coal (excluding metallurgical coal), and includes mutual funds and exchange-traded funds with over 2 percent fossil fuel assets.

Provides indemnification and legal protection for board members, state officers, and investment managers for actions taken in compliance with divestment requirements.