Albany committee forwards updated ESG investment policy with value statement to city council

On Oct. 13 the Audit and Fiscal Sustainability Standing Committee recommended the City Council adopt an updated investment policy that adds a value statement to Albany's environmental, social and governance (ESG) investing framework and clarifies how excluded companies would be communicated to the city's investment manager.

The value statement language discussed would emphasize supporting responsible companies, avoiding ‘‘harmful industries,’’ and using multiple sources to evaluate alleged human-rights violations. Raina Schwartz, finance director, said the item was returning to the committee after adoption of a revised city investment policy and an ESG implementation policy and that the committee could provide direction on whether to include a value statement.

"This is an item that is returning to the committee after council adoption of a revised investment policy as well as an ESG implementation policy," Schwartz said. Committee members and staff emphasized that the detailed directives to the city's portfolio manager would continue to be carried in the ESG implementation policy rather than in the higher-level investment policy.

Whitney Maniverse noted the implementation policy contains the specific Bloomberg and other category instructions required for the city's adviser (PFMAM) to manage the portfolio. She also reminded the committee of a statutory requirement that the council annually review and adopt an investment policy because the treasurer is an appointed, not elected, position.

A member of the public who spoke during the item said she supported the draft value statement and asked whether the review of excluded companies would occur quarterly or annually. Committee members and staff agreed the policy should require at least an annual review while also making quarterly ESG performance data available to inform more frequent action if needed. Staff said PFMAM had been able to divest three companies within weeks after the September adoption of the ESG implementation policy.

Committee members debated wording and mechanics, including language to address companies that may "facilitate or enable severe violations of human rights, war crimes, and crimes against humanity," and agreed to forward the edited policy to the full City Council with a recommendation for adoption. A committee member moved to recommend the updated investment policy as presented; another member seconded and the motion carried. The motion included an explicit amendment allowing staff to make legal or stylistic refinements before the document goes to council.

The committee and staff repeatedly clarified procedure: the City Council, if it chooses to exclude a company, will do so by directing an update to the ESG implementation policy, which will then be forwarded to the city's investment adviser for execution. Staff said the quarterly investment report will include an ESG performance segment so the council and committee can see ESG metrics on a recurring basis and trigger review if needed.

The committee did not adopt final text for the investment policy at this meeting; it voted to forward the updated version for Council consideration with staff-authorized refinements.