An official call from San Francisco politicians to divest The City’s retirement fund from fossil fuel companies is not going anywhere for a while. And the $584 million invested with the likes of Chevron and Exxon Mobil might just stay put.
San Francisco’s $15.3 billion pension plan has a social justice policy that has in the past led to divestment in tobacco companies and firms connected to genocide in Sudan and apartheid-era South Africa.
Fears over global warming have moved city officials in Seattle and elsewhere to push their pension plans to sell off holdings in oil, gas and other similar companies. On Tuesday, the Board of Supervisors passed a nonbinding resolution urging the San Francisco Employees’ Retirement System to follow suit.
The City’s various investment funds include shares in more than 200 companies that are involved with fossil fuels. More than $112 million is invested in Exxon and $60 million in Chevron, according to records.
But taking money out of a fund is not easy. It’s a three-step process, with divestment the third and most-serious step.
Under its social justice policy, The City must first use its status as a voting shareholder to encourage a company to become “a good corporate citizen.” After voting, The City then actively campaigns for the company to change its ways. Only after the first two steps are taken can The City divest in a fund.
This process can take up to six months or longer, as it did when The City shed its investments in companies tied to South Africa’s apartheid-era regime.
Real estate investor Victor Makras, a longtime Retirement Board member, said the divestment will be taken seriously.
“We’d give it consideration if one supervisor asked us to look at it — and in this case, it was the full board,” he said. “I believe we have a lot of options with our investments.”
In order for the process to begin, a member of the Retirement Board must make a motion to begin the first step. It is unclear which board member, if any, would make such a move.
Recent divestment moves at the Retirement Board have fizzled. A push to begin divestment in shares of Wells Fargo failed when board member Herb Meiberger’s motion did not get a sponsor.
Supervisor Malia Cohen, who supported Tuesday’s resolution, is a member of the Retirement Board and could begin divestment proceedings. Approached for comment outside a Retirement Board committee meeting Thursday, Cohen said she was not prepared to comment.
Supervisor John Avalos, who sponsored Tuesday’s measure, pointed out that divestment carries a low fiscal risk.