Connecticut’s $35 billion retirement fund joins effort to nudge gun makers toward reform

Nov. 15--Denise Nappier, who as state treasurer steers Connecticut's $34 billion pension fund, has signed on to a coalition of public and private investors hoping to nudge gun manufacturers towards modest reforms. For leverage, she wields a retirement fund that includes $66 million invested in companies that make or sell firearms.

On Wednesday, Nappier joined pension funds in California, Florida, Maine, Maryland and Oregon, along with several private investors, in signing on to five principles as a "conversation starter" with gun manufacturers that have received investment from the funds.

The coalition of funds hope to move gun manufacturers towards reforms that would make their products easier to track and more difficult to acquire for "those too dangerous to possess firearms," the coalition wrote in a news release. The proposed reforms also include regular audits of firearms inventories and monitoring "irregularities at the point of sale."

The statement is largely symbolic, however; nowhere in the news release does the coalition threaten to divest from the gunmakers. Rather, getting the companies to adhere to the reforms would "help to ensure the long-term financial health of the civilian firearms industry and where possible, allow for continued investment/funding of companies within the industry," the coalition said.

Nappier made it clear that Wednesday's statement was made, not necessarily out of moral virtue, but of her fiduciary duty to reduce investment risk for the 219,000 state and municipal employees whose pensions she manages.

"The proliferation of gun violence is not only a public health issue," she said in a statement, "but also a business risk issue, both of which are central to our fiduciary role as long-term institutional shareholders."

Some public retirement funds, including one for California teachers, have divested from gun manufacturers. Most grounded the decision in financial, not moral, arguments: in the case of the California teachers' fund, which cut ties with gunmakers after the 2012 Sandy Hook shooting, its overseers feared forthcoming regulations would harm the firearms industry.

"After the Sandy Hook disaster, our board took a look at particularly firearms, and decided there are certain companies that made firearms that were already illegal in the state of California, and felt that that regulation may expand and hurt those companies," Christopher Ailman, the fund's chief investment officer, explained to NPR. " And so we divested of them."

Connecticut's treasurer-elect, Shawn Wooden, vowed during his campaign to purge the state's investment portfolios of gunmakers.

"As someone who like so many others has lost a family member to gun violence, common-sense reforms to improve firearm safety and reduce the loss of lives are critically important to me," Wooden said in a statement Wednesday. "I support the principles set forth by the coalition and will be taking active measures as treasurer to ensure that they are adopted by the gun manufacturers in which Connecticut is invested. I am also prepared to divest from gun manufacturers that fail to support such reforms that will save lives as well as protect long-term shareholder value."

Connecticut has invested $66 million in companies that produce or sell guns, less than 0.2 percent of the retirement fund's balance. The majority of Connecticut's gun-related investments -- more than $55 million -- are in retailers that sell far more than guns: Walmart, Kroger Co. and Dicks Sporting Goods, for example.

After a gunman wielding an AR-15 rifle killed 17 people at a Florida high school in February, Dicks Sporting Goods stopped selling assault-style rifles and raised the minimum age for firearms purchases to 21. Walmart, which ended assault-style rifles sales in 2015, also raised the minimum age for gun sales to 21 after the massacre.

About $10.4 million of Connecticut's retirement fund is invested in gun manufacturers, including $4.7 million in Compagnie Financière Richemont SA, a luxury holding group that includes Swiss watchmakers, designers of fine jewelry and Purdey, a London gunmaker whose bespoke shotguns start at £100,000, or about $130,000. The state has also invested about $3 million in Vista Outdoor, whose brand Savage Arms produces AR 15-style rifles.

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