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Supervisors send fossil fuel divestment resolution to full Board after lengthy debate and public comment
Summary
The GAO Committee heard a resolution urging the San Francisco Retirement System to renew its commitment to divest from publicly traded fossil fuel companies. Retirement board commissioner Victor Macros and Executive Director Jay Huish debated performance and engagement strategies; dozens of public commenters urged immediate divestment. The committee moved the resolution to the full Board with recommendation.
The Government Audit and Oversight Committee on Sept. 5 considered a resolution urging the San Francisco Employees' Retirement System (SFRS) to renew its divestment commitment from publicly traded fossil fuel companies and to provide an update on public and private equity fossil fuel holdings.
Supervisor Aaron Peskin, the resolution's author on the committee, framed the item as a fiduciary and climate concern. "Pension fund fiduciaries should consider their portfolios' exposure to climate-related risk and whether or not they are investing in a manner consistent with the best interests of their beneficiaries," Peskin said in presenting the item.
Commissioner Victor Macros (appearing in his personal capacity) told the committee he put a motion before the retirement board to divest because he believes returns on the roughly half-billion dollars invested in fossil-fuel-related equities have been poor over the past decade and the public should have access to the holdings and returns data. "When I looked at it... it looks like we've made no money in the past 10 years for roughly the half a billion dollars we have invested," Macros said.
SFRS Executive Director Jay Huish said the retirement system has pursued an engagement strategy, joined international investor initiatives and removed thermal coal holdings; he described active proxy voting and coalition engagement (Principles for Responsible Investment, etc.) and said staff would produce the requested return and holdings data. "We've done as much as any public pension plan in The United States," Huish said, noting divestment of thermal coal companies and the creation of a $100,000,000 fossil-free index investment.
Public commenter Jed Holtzman of 350 Bay Area and other speakers argued divestment is both a fiduciary and moral imperative; several speakers disputed staff's characterization of prior divestments and called the retirement board's pace "abysmal." Community members recounted climate impacts and urged supervisors to press the retirement board for an orderly but timely divestment plan.
After public comment and internal questioning about returns, engagement and legal exposure, the committee voted to forward the resolution to the full Board with a recommendation. Committee members also asked the retirement board for prompt production of holdings and return data requested by Commissioner Macros.
Next steps: the resolution will be considered by the full Board on Sept. 12; retirement board staff said they will provide requested data on holdings and 3-, 5- and 10-year returns to the Board and to interested commissioners.
