SF board decides not to divest pension money from fossil fuel companies

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

San Francisco’s public pension fund will not divest more than $530 million of the portfolio’s investments in fossil fuel companies.

The seven-member San Francisco Employees’ Retirement System board, which manages a $13 billion investment fund that pays for city workers’ pensions, rebuffed calls for divesting Wednesday. The board was poised to make history in becoming the first public pension fund to divest in fossil-fuel holdings.

That’s what Department of Public Health nurse Martha Hawthorne had wanted.

“We don’t have to choose between having a pension or a planet,” Hawthorne said. “We can have both. The best investments are those which will bring us returns today and ensure our future tomorrow.”

The scheduled vote on divesting from companies such as Exxon Mobil and Chevron was prompted by a growing nationwide campaign for college endowments and public pension funds to pull such investments, in order to combat climate change and speed up production of renewable energy. The Board of Supervisors had unanimously passed a resolution introduced by Supervisor John Avalos urging the divestment.

Supervisor London Breed called on the retirement board to “demonstrate that San Francisco refuses to profit from the most egregious contributors of climate change.” And she said if and other investment funds follow suit, it could compel companies to move toward cleaner energy.

No public pension fund has divested from fossil-fuel investments. A handful of small universities, including San Francisco State University, have pulled endowment investments from oil companies.

None of San Francisco’s retirement board members proposed actually divesting. But some wanted to begin engaging with the companies to try and effect business changes.

“The smart thing to do is to engage [companies],” said board member Victor Makras, adding that big business is slow to change until there is public pressure.

Board member Brian Stansbury said there was a need to “slow down.”

“If you go to some of the biggest assets in our portfolio, Chevron, Exxon Mobil, you see they are not just a fossil-fuel company. They are involved in solar, they are involved in natural gas. You can’t just turn off the spigot to fossil fuels and turn on something else,” Stansbury said, adding that “I do not see our portfolio without energy.”

The retirement board voted to gather more information, including an analysis of current proxy voting policies in relation to climate change.

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