Fossil fuel divestment vote suspended at San Francisco pension fund

The vote that never was as some trustees aren’t available

The board of the San Francisco Employees’ Retirement System (SFERS) announced it would not vote on the motion to fully divest all its fossil fuel portfolio because two trustees of the seven-member board were not able to attend the meeting on August 9.

As a result, the trustee driving the divestment initiative, Victor Makras, requested an agenda item to “continue to the call of the President” in order to “have greater Board participation in this important discussion.”

That means, according to Patrick Monette-Shaw, columnist at local outlet The Westside Observer and a SFERS beneficiary, that the vote will take place in October. Makras, one of the three appointed trustees, and Malia Cohen, ex officio member from the City’s Board of Supervisors, would possibly be out of town for the next meeting, in September.

The current three elected trustees are all “public safety” representatives (police and firefighters), including Brian Stansbury, a police officer who voted against divesting from thermal coal in the 6-1 vote in December 2015.

Ahead of the vote, on August 7, the San Francisco Police Officers Association (SFPOA) urged SFERS not to divest from fossil fuels and to follow the advice of SFERS’s staff and NEPC, the investment consultant.

SFPOA President Martin Halloran stated that divesting fossil fuels is “purely a political position here in San Francisco”.The association echoed NEPC and the fund’s own staff recommendations that divesting would neither reduce greenhouse gases nor the demand for oil but rather transfer ownership to other investors, that unlike SFERS, “will not be pushing for sound environmental practices”.

Halloran also stated: “The very companies SFERS are talking about divesting from will likely lead the way in renewables.”

One of the arguments being used by NEPC and fund staff is that no US public pension fund has divested from fossil fuels.

But, in a letter to RI, Jed Holtzman, Senior Policy Analyst at 350BayArea, pointed out that it is incorrect.

“At the least, the DC Retirement Board has done so. While DC’s fund is certainly smaller than SFERS, it is a shame to continue to report that no one has divested and that they would be the first.”
In June last year the District of Columbia Retirement Board informed that its direct holdings the in the top 200 corporations with the majority of the world’s fossil fuel reserves “were reduced from approximately $20 million (0.33% of Trust Fund assets) to 0% over the last past couple of years”.

According to its latest annual report, the $6.8bn fund earned a net return of 9.3% for the 2016 financial year.