California schoolteachers hold 6% stake in riflemaker tied to shootings*

Actually, it's the California State Teachers' Retirement System. It invested $500 million into a $7.5-billion fund that helped bankroll the firearms conglomerate Freedom Group. Freedom makes Bushmaster rifles, one of which was used to murder 20 first graders and seven adults in Connecticut. Not that most, if any, California teachers could have been aware of the connection, which is being reported by Fortune's Dan Primack. But what about the officials at CalSTRS? Here's the pension system's statement on investment responsibility:

Non-economic factors will supplement profit factors in making investment decisions. Non-economic factors are defined as those considerations not directly related to the maximization of income and the preservation of principal. The consideration of non-economic factors is for the purpose of ensuring that the Retirement System, either through its action or inaction, does not promote, condone or facilitate social injury.

From Primack:

To be sure, there is a difference between buying a listed company's stock and investing in a private equity fund that promises to build out a diversified portfolio. Direct versus indirect. But it also is true that certain institutional investors either, (a) Only invest in private equity funds that pledge not to make certain types of investments (e.g., firearms, tobacco, etc.), or (b) Insist that its money be carved out of any such offending investment, so that the institution does not become an indirect shareholder. "Clearly you can make a case that this company's products fall within the 21 risk factors, particularly the one regarding human health," says CalSTRS spokesman Ricardo Duran. "But there are a lot of products that can be used responsibly or irresponsibly, and in this case it was used irresponsibly... Now that a tragic event like this has occurred, I'm sure that it is something that we will be discussing going forward."

Going forward? How long do you give it before CalSTRS looks to dump its stake? If nothing else, Friday's massacre could prompt other pension funds, along with nonprofits and university endowments, to recheck their portfolios - and perhaps make adjustments.

*Update: The private equity firm Cerberus Capital Management, which held a stake in Freedom (CalSTRS held a stake in Cerberus), now says it will unload its investment. From the NYT:

Cerberus acquired Bushmaster -- the manufacturer of the rifle used by the gunman in the Newtown attacks that killed 27 people, including 20 schoolchildren -- in 2006. The private equity giant later merged it with other gun companies to create the Freedom Group, which reported net sales of $677.3 million for the nine months that ended in September 2012, a 20 percent increase compared with the same period last year.