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Pension fund invests in dirty fossil fuels

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The pension funds of San Francsico’s city employees are currently invested in fossil fuel companies like Exxon Mobile (refinery pictured in St. Bernard Parish, La.) Chevron and ConocoPhillips. (Gerald Herbert/AP)

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As leaders gather in Paris to discuss climate change, it’s hard not to feel smug as a San Franciscan. The City’s climate policies, including our composting program and solar initiative, are some of the most innovative and successful policies in the world. But the ineptitude of one bureaucrat and the status quo thinking of The City’s Retirement Board have caused a serious crack in San Francisco’s green facade.

Approximately $480 million in San Francisco employees’ pension funds are currently invested in dirty fossil fuel companies, including Exxon, Chevron and ConocoPhillips. This means city employees are banking on the continued extraction of coal and oil — resources that must stay in the ground if we’re going to avoid catastrophic climate change. City employees are funding the very polluters they’re fighting.

In April 2013, the Board of Supervisors passed a resolution urging the San Francisco Retirement Board to divest pension funds from fossil fuel companies. But the Retirement Board has done almost nothing in response and, more than two years later, San Francisco employees are still funding big oil and coal.

“It’s inexcusable,” Jed Holtzman, co-coordinator of the Fossil Free San Francisco divestment campaign, told me. He said larger pension funds are divesting from fossil fuel companies, including the California public employees’ and state teachers’ pensions. The Retirement Board also previously divested from companies that supported apartheid, atrocities in Sudan and big tobacco.

Why is San Francisco’s divestment from companies that contribute to climate change different?

Jay Huish, the Retirement Board’s executive director, may be the reason. In October, Supervisor John Avalos asked Huish to explain why the board hasn’t divested from fossil fuels. Huish spoke for almost an hour, but I only needed seconds to understand the problem: He doesn’t do his job.

Huish takes months to fulfill board requests for information. He slows progress by scheduling procedural votes instead of action items. Under his watch, the Retirement Board actually voted against sensible corporate environmental disclosure and action.

Huish became executive director in 2012, so he wasn’t in charge when the Retirement Board divested from tobacco in 1998. I asked Commissioner Herb Meiberger, who championed the tobacco effort, whether divestment was easier without Huish around. His answer was surprising. “For tobacco, the executive director was irrelevant. I put a resolution on the table and got four votes,” Meiberger said. “Staff didn’t get involved. Maybe that’s why it flew through.”

Perhaps I was too quick to place all the blame on Huish. Although it’s been clear for years staff hinders progress, the Retirement Board hasn’t remedied the problem. They’ve allowed bureaucratic ineptitude to slow fossil fuel divestment as coal and oil stocks tank and the value of the San Francisco pension investments drops. According to 350.org, more than 500 institutions representing more than $3.4 trillion in assets have committed to divest from fossil fuel companies. But San Francisco’s Retirement Board is stubbornly holding on.

That could change today. The board will consider divesting from thermal coal at 1 p.m. Commissioner Victor Makras told me he is optimistic the item will pass, and Meiberger is also positive.

“I will champion the cause to sell thermal coal stock and use the proceeds to invest in renewables,” Meiberger promised.

But the board must do more than divest from a few coal companies to fix the problems undermining The City’s climate leadership. I see no difference between Philip Morris concealing cigarette risks and Exxon concealing climate change risks. The board should adopt the same aggressive divestment strategy it passed for tobacco and stop funding Exxon and all fossil fuel companies that use city money to pump more oil and dig more coal.

The board should also remove Huish and replace him with someone who does their job. San Francisco is a city of progress, not excuses. The Retirement Board has a fiduciary responsibility to city employees and a social responsibility to the planet to do more.

Robyn Purchia is an environmental attorney, environmental blogger and environmental activist, who hikes, gardens and tree hugs in her spare time.

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