San Francisco retirement fund board could vote to divest from fossil fuel companies

Jay Huish is the executive director of San Francisco's retirement system.

Jay Huish is the executive director of San Francisco's retirement system.

San Francisco’s public pension fund may become the first in the nation to divest from fossil fuel companies, with a decision expected today on whether to yank more than $530 million of investments in Exxon Mobil, Chevron and others.

The scheduled vote by the San Francisco Employees’ Retirement System board, which manages the investments that pay city government workers’ pensions, comes seven months after the Board of Supervisors unanimously approved a resolution by Supervisor John Avalos calling for divestment from fossil fuel companies within five years. Supervisor Malia Cohen also sits on the seven-member retirement board.

“When we see the damage that fossil fuels and carbons do to our environment and how much oil reserves corporations already have to damage the Earth, why invest in more reserves?” Avalos said, noting that investments help pay for oil exploration. He added that oil companies’ current supply is enough “to actually cook the planet beyond recognition.”

Past divesting includes tobacco and Sudan-related companies, but the fund had much smaller amounts invested in those areas. The pension fund has 3.1 percent, or about $532 million, invested in fossil fuel companies, said a memo from Jay Huish, executive director of the retirement system.

If the board decides to divest, it would become the first public pension fund to do so, Huish said. Six college endowments, including San Francisco State University, have divested from fossil fuel companies amid an increased push by students in the past year. Huish noted, however, that these endowments totaled less than $130 million “and none of the colleges had substantial fossil fuel assets.”

Massachusetts could become the first state pension fund to make such a divestment, with a pending bill that would eliminate its $1.4 billion in oil, mining and refining companies within five years.

Huish cast doubt on the ability to divest, saying that “there may be fewer appropriate substitutes” in lieu of the fossil fuel companies. He also said that a divestment would eliminate The City’s leverage to engage with the companies to try to effect business policy changes.

But Avalos and supporters of the divestment say it also actually makes financial sense to pull back now. They say there is “growing evidence” of a “carbon bubble,” and as governments face further mandates to reduce greenhouse gas emissions, fuel companies’ stock prices will “plummet.”

Mayor Ed Lee did not sign Avalos’ legislation, which signals his opposition.

Investment portfolio

San Francisco’s multibillion-dollar pension fund has $532 million invested in fossil fuel companies. Here are the top 5 investments, along with their current stock market value:

Exxon Mobil: $97,338,981

Chevron: $56,506,571

ConocoPhillips: $22,473,335

Anadarko Petro: $16,303,386

Occidental Petroleum: $14,886,143

Source: San Francisco Employees’ Retirement SystemBay Area NewsFossil fuelsGovernment & PoliticsJohn AvalosPoliticsSan Francisco Employees’ Retirement System

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