By Linda Weiner
In April 2013, the San Francisco Board of Supervisors passed a unanimous resolution urging the SF Employees’ Retirement Board (SFERS) to divest from fossil fuels within five years. It is now the winter of 2018 and there has been little progress, even though a concerted effort has been made by many groups including 350 Bay Area, SEIU-1021, the Sierra Club, and SF Defund DAPL Coalition.
In December 2015, SFERS directed its staff to prepare a plan to divest from coal. But in May 2017, staff proposed and SFERS approved divesting $446,000 (less than 1%) of its $48 million in coal holdings. Clearly there is much more to be done. And it needs to be done now.
For three years, SFERS has undertaken an “engagement” strategy with fossil fuel companies, working with other shareholders in those companies to develop clear expectations, but this strategy has not worked. Engagement is a slow and arduous process. Moreover, tackling climate change requires overhaul of the core business model of the fossil fuel industry, which is not legal to demand through shareholder engagement. Lastly, engagement makes no sense without the threat of divestment.
It is painfully clear that the impacts from climate change in California are accelerating dramatically: wildfires, drought, mudslides, and sea-level rise; it is equally obvious that the number one barrier to genuine climate progress is the fossil fuel industry. Along with being the only moral choice in an ever-warming world, divestment makes good financial sense. As the world moves its energy system away from fossil fuels, more investment has been steadily occurring in renewable energy. Meanwhile, it has been determined that approximately 50% of the SFERS fossil fuel investments have had negative returns for at least three years.
The moral and financial imperatives to divest have been presented to SFERS at many meetings, but on January 24th, a special meeting was called on divestment. Hundreds of letters and emails were sent to the Retirement Board in support of divestment and over 100 people showed up at the meeting to provide public comment, including representatives of the Sierra Club. Beforehand, a news conference was held at City Hall, spearheaded by Supervisor Aaron Peskin’s office, to urge SFERS to divest.
Several investment professionals at the meeting spoke in favor of some type of divestment soon. But despite the outpouring of public support for divestment and the many reasons to do so now, the Retirement Board did not vote for full divestment with a timed deadline. They opted instead for a continuation of the “engagement” process and a “phased divestment” of the riskiest and dirtiest funds once they determine how to define them. They also voted to move $1 billion into a “carbon-constrained” fund, and agreed to hire a staffer to oversee environmental and social engagement in their overall portfolio. A motion was passed to develop a plan for investment by April 30, 2018 that would protect pension returns and divest from some fossil fuels.
The only way this plan will work is if our coalition monitors progress and continues to pressure the board to do the right thing in a timely fashion, because there is no time to waste. The serious impacts from climate change will continue, but so will our strong commitment to stop carbon emissions and transition to renewable energy.
Linda Weiner is a member of the Sierra Club’s San Francisco Group Executive Committee.
Photo: Holding the Sierra Club banner, left to right, Sierra Club San Francisco Group Executive Committee members Kathy Howard, Linda Weiner, and Barry Hermanson before the January 24 SFERS board meeting on divestment.