Alameda County supervisors approve ethical investment policy, delay implementation for peer review

Alameda County supervisors voted on Oct. 3 to adopt a new Ethical Investment Policy (EIP) drafted by County Treasurer Henry Levy but delayed putting it into effect until the county’s finance committee and a hired consultant complete a peer review.

The policy, presented by Treasurer Henry Levy, would add responsible and ethical investment criteria to the county’s Investment Policy Statement to guide positive screening, identify sectors for closer review, and set conditions under which the treasurer could recommend divestment to the board. Levy told the supervisors the county pool he oversees holds nearly $10,000,000,000 and that corporate holdings make up about 10% of the portfolio across roughly 38 companies.

“State law is really clear on this,” Levy said during the meeting, citing the required priority of safety, liquidity and yield. “Safety is number 1. Liquidity is number 2. Yield is number 3.” He also said the portfolio earned returns of about $400,000,000 last year — roughly 4% on the fund — to explain why he does not expect the criteria to materially harm returns.

The meeting opened with procedural remarks and a remote-participation disclosure from Supervisor Marquez, then moved to a 90+ minute staff presentation in which Levy described the policy’s development (25 listening sessions, review by the Treasury Oversight Committee) and explained the policy’s screening approach — emphasizing positive screening but allowing for limited negative screening or divestment where reputational, operational or legal risk is severe and unremedied.

Public comment consumed more than an hour and a half and sharply divided speakers. Supporters — including labor, faith leaders, nurses and human-rights advocates — urged adoption, asked the board to insert explicit references to “genocide” and “apartheid,” and praised the treasurer’s prior divestment from Caterpillar. Opponents, including representatives of several Jewish organizations and other residents, said the draft is too vague, could be applied selectively against Israel, risks inflaming antisemitic threats in the county, and raised questions about the treasurer’s transparency and portfolio performance. Several speakers and a public report alleged that the portfolio had underperformed by tens of millions of dollars; Levy disputed the framing and said the reported figures were misunderstood and that the portfolio’s returns remain strong.

Supervisor discussion focused on three recurring themes: (1) whether the EIP’s language (particularly the clause referencing “human rights violations”) was sufficiently objective and universal rather than country-specific; (2) whether the treasurer should retain discretion for case-by-case decisions or be required to seek the board’s approval for divestments; and (3) whether an outside peer review was needed to test the policy’s likely impact on safety, liquidity and yield and to evaluate benchmarking and reporting practices. Several supervisors asked the finance committee or the Treasury Oversight Committee (TOC) to supervise the peer review and to recommend any changes.

Supervisor Miley moved to adopt the policy as written but to withhold implementation pending a peer review coordinated by the board’s ad hoc finance committee (with the TOC involved as appropriate); Supervisor Tam seconded. On the final roll call the motion passed by a majority.

The board’s action adopts the EIP in principle but directs the county to secure a neutral outside review to analyze the policy’s fiscal implications, the proposed screening tools and the operational steps the treasurer would take before the policy takes effect. The treasurer said he had already worked with consultants in drafting the criteria and welcomed further review to refine rating tools and reporting.

The board recessed to closed session later in the day and returned with no reportable closed-session actions. President Halbert adjourned the special meeting after the vote.

What’s next: the finance committee will oversee procurement of a consultant and a peer review; the county will not implement the policy until that review completes and the finance committee and/or the TOC bring recommendations back to the full board.