Confronted Wednesday with whether to sever ties with the fossil fuel industry, the board that manages investment of The City’s retirement plans moved instead to implement a series of staff recommendations that include assessing its risky assets and developing engagement plans with companies.
San Francisco Employees’ Retirement System Board staff had advised against a proposal to sell off The City’s fossil fuel stocks completely, and recommended instead the board create a new position for director of socially responsible investing and allocate $1 billion to fund a new “carbon-restrained” investment strategy, among other things.
On Wednesday, Board Vice President Wendy Paskin-Jordan added to the recommendations by requiring staff to identify “risky” assets among the some 200 fossil fuel companies in which The City invested, in an effort to begin “divestment as soon as possible,” and to replace these with “better performing assets.”
Paskin-Jordan then slapped a timeline on her ask, initially calling for board staff to report back with this list by July 31.
Supervisor Malia Cohen, who serves as a commissioner on the board and has previously voiced her support for the divestment movement, further bolstered the staff recommendations by calling for staff to identify a “concrete” definition of The City’s “riskiest and dirtiest” fossil fuel assets. Staff is expected to report back to the board with definitions on April 30.
She also asked for retirement system staff to procure a report of the financial returns of The City’s assets, as well as a plan for engaging fossil fuel companies complete with a timeline for terminating those that do not comply with the board’s benchmarks.
Despite some disagreement among the retirement commissioners over the staff’s capacity in preparing the reports in the coming months, a deadline for Cohen’s report was set for July 31.
“I would think that staff would have a list of our holdings and the rating of our holdings as of today. They have failed for the past five years to assess our current holdings. It’s one clear example in their defiance of us divesting,” said Commissioner Victor Makras, who in the past has criticized delays on the part of the retirement system’s staff in providing information on its fossil fuel assets.
Regardless, Makras called Wednesday’s vote “a clear and distinct step towards divestment.”
The decision came despite significant grassroots support for the full divestment of The City’s pension funds from fossil fuels — some $559 million — and to the chagrin of roughly 100 divestment supporters who attended the public hearing that stretched some four hours.
In an effort to avoid a delay on the divestment vote, more than half of the speakers who had initially signed up for public comment yielded their time. Members of the public yelled “vote now” as the retirement commissioners adhered to protocol requiring them to call the name of every individual who had signed up to speak during public comment.
“We are back to where we were in 2013 — another plan to make a plan,” said Trevor Martin, treasurer of the San Francisco Berniecrats and a member of SF Defund DAPL (Dakota Access Pipeline).
“Coming in here, we wanted immediate divestment from at least those assets that were underperforming for the last 10 years — to come out of here today with a plan to make a plan, is very disappointing,” Martin added. “They speak in assets and investments, but the thing they don’t understand is that there is no such thing as an investment in a future that will not exist. ”
The Retirement Board was first prompted to divest from fossil fuels in 2013, when the Board of Supervisors unanimously passed a resolution authored by then-Supervisor John Avalos.
That call was reiterated with a similar resolution sponsored by Supervisor Aaron Peskin last September. Board of Supervisors President London Breed expressed her continued support for full divestment from fossil fuels during a rally at City Hall hours prior to Wednesday’s vote.
“We have a seawall that needs to be armored because of sea level rise,” Peskin said on Wednesday, addressing the Retirement Board directly. “We all cannot afford to wait around for reports and more strategies.”