Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Esg Investing topic
No spam. Unsubscribe anytime.
Pasadena pension board to require ESG ratings be disclosed and considered in future investment reviews
Summary
After public comment and a lengthy debate, the Pasadena Fire & Police Retirement System board voted to require consultants and staff to disclose MSCI ESG ratings and consider those scores as a factor when bringing investment recommendations to the board.
The Pasadena Fire & Police Retirement System board voted July 6 to require that ESG ratings be disclosed and used as a factor when the board evaluates future investment recommendations. The motion, moved by Member Cole and seconded by a colleague on the subcommittee, passed on a roll call with Member Singh, Cole, Kruseberg, Vice Chair Boyle and Chair Jones voting yes.
The vote follows a lengthy discussion that included a staff presentation on comparative ESG ratings and public comment from local residents and financial advisers urging stronger ethical investment guidelines. "I think the next time we examine our portfolio balancing, we ought to consider an ESG pilot," Member Cole said, framing the proposal as a cautious first step rather than wholesale divestment.
Several public speakers argued the board should align investments with community values. Randy Heine Lamb, a Pasadena resident and retired nurse, urged the board to "strongly consider and support the resolution" and said investment policy choices can have humanitarian consequences. Financial adviser Mike Pools told the board that roughly $6,600,000,000,000 in the U.S. is managed using ESG factors and urged the board to adopt ESG considerations for its clients.
Staff and the board's consultants explained how MSCI calculates ESG ratings for funds based on holdings and stressed that a rating does not necessarily mean a manager is ESG-focused. Staff recommended disclosing ESG scores as part of manager searches; the motion approved by the board directs staff and consultants to include MSCI ESG ratings in materials and treat the score as one factor in the evaluation process.
Board members debated whether formal language was required. Chair Jones expressed caution about codifying a specific weight for ESG but supported requiring disclosure of scores. Member Cole said disclosure and considering ESG as a factor can be flexible: "It could be a factor of 0 to you. It could be a factor of a lot to me," he said, arguing the board could assign different weight over time.
The board did not adopt a binding exclusion policy or an immediate divestment plan; rather, the action requires that ESG ratings be presented and considered alongside other traditional criteria such as performance, cost and manager tenure. Staff said it will incorporate MSCI ESG scores into future manager recommendations and search materials.
The board’s action is procedural: it changes what information trustees will receive and how they will evaluate recommendations but does not itself direct any immediate purchases or sales.
