In 2008, CalSTRS developed a set of 21 risk factors to consider in investments that included corruption, a country's adherence to human rights policies and human well being. It's now a "triple bottom line," which includes the human well-being check that Duran says would be the key to any firearm divestitures.

"We have been able to maintain that balancing act of fiduciary responsibility to our members to what is socially responsible," says Duran. "I think it is a point of pride."

Still, any prospective retreat from investments in manufacturers of assault rifles won't come lightly. Treasurer Lockyer says he expects dissent among some board members of CalPERS and CalSTRS. As California attorney general, Lockyer reinstituted an assault-weapons ban, enforced NRA-supported gun confiscations from felons and fined Wal-Mart for violating the state's gun laws. Still, Lockyer says he'd likely support overall Second Amendment rights and any related investment policy.

Lockyer wasn't able to say how far the state may eventually go, when pressed on whether it could dispose of all firearm assets or national retailers of firearms -- such as Cabela's ( CAB) -- that don't just abide by California state law.

CalPERS and CalSTRS are both small investors in Smith & Wesson, Sturm, Ruger, Cabela's, Dick's Sporting Goods and they are large holders of Wal-Mart shares, according to Securities and Exchange Commission filings compiled by Bloomberg, as of Sept. 30.

Both Lockyer and Duran of CalSTRS highlighted the challenge of locating investments in companies or industries prohibited by California investment policies, pointing to private equity assets such as the Freedom Group position taken by Cerberus as particularly hard to locate.

Maintaining compliance with existing bans also appears to be a challenge. According to Bloomberg data, CalPERS is currently an investor in the nation's four largest tobacco companies, Philip Morris ( PM), Altria ( MO), Lorillard ( LO) and Reynolds American ( RAI). While the fund's combined stake is a negligible $5.65 million compared with $54 billion in common stock holdings as of Sept. 30, the fund's total tobacco stake was nearly fourfold as of its March 31 filing.

Pension investors may be just one set of Wall Street-tied movers in the firearm debate spawned by Friday's shooting. Decisions by Wal-Mart and Dick's Sporting Goods signal that corporations may follow suit, and it's to be seen how far support extends for a strengthened gun policy.

On Tuesday, the National Rifle Association said it would make "meaningful contributions to help make sure this never happens again," in reference to unspecified policy change in the wake of the shooting.

Sen. Dianne Feinstein (D-Calif.) said on Tuesday she would work to revive an assault-weapons ban in the 2013 congressional session.

After his widely praised memorial speech on Sunday, President Barack Obama has appointed Vice President Joseph Biden to lead policy efforts to curb gun violence.

-- Written by Antoine Gara in New York

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