San Francisco Takes Aim at Fossil Fuel Companies
SAN FRANCISCO—Flexing its environmental muscles, San Francisco is urging the city’s pension funds to immediately stop investing in fossil fuel companies.
A resolution that was passed by the city’s Board of Supervisors Tuesday also calls on the pension funds to divest $580 million that is currently invested in the 200 largest publicly traded fuel companies.
The resolution, initiated by San Francisco Supervisor John Avalos, District 11, cites concerns over the rise in temperatures around the world and the role of carbon dioxide emissions from the burning of fossil fuel.
“The scientific consensus is that if global warming exceeds two degrees Celsius it would have catastrophic consequences on human life,” Avalos said at the board meeting.
Avalos said he intends to urge fossil fuel companies to stop using the world’s fuel reserves at the current speed, as well as have the city invest more in alternative energy.
“Divesting from fossil fuels is not just the moral thing to do, it is fiscally responsible. As climate change worsens, governments will eventually be forced to act,” he said.
Citing a report by the Aperio Group investment management firm, Avalos said that divesting all investments in fossil fuel companies would increase the portfolio risk by only 0.01 percent.
Though some of the supervisors on the 11-member board had raised concerns over how the divestment of the funds would impact the financial performance of the city’s retirement funds, the resolution was adopted unanimously.
“I think it is really important that—more than just making a statement—we make that statement with our dollars. In many ways that is the more important way to show what our political principles are,” Supervisor Jane Kim, District 6, said.
Fossil fuel companies included in the resolution are 200 publicly traded companies that have the largest reserves in oil, gas, and coal.
The resolution is non-binding, leaving the final decision for divesting to the Retirement Board. The resolution calls for the divestment to be done within five years.
Supervisor Kim said she thinks it would be reasonable if the divesting takes longer than five years.
The resolution urges the Retirement Board to publish quarterly updates on the progress of the divestment.