Tag: San Francisco pensions

San Francisco Pension Votes to Engage With Fossil Fuel Companies Over Climate Change; Next Step Could Be Divestment

Golden Gate Bridge

The Board of the San Francisco Employees’ Retirement System (SFERS) voted Wednesday to begin engaging with the fossil fuel companies in which it invests.

The vote opens the door for an eventual vote on divesting from fossil-fuel companies altogether – an idea that is sure to receive mixed reviews from board members and city officials.

The pension fund currently holds about $540 million in fossil fuel companies, which accounts for less tan 4 percent of the fund’s entire portfolio, according to SF Gate.

More details from SF Gate:

The board voted Wednesday to go to “level-two engagement,” meaning it will actively attempt to influence the policies of the companies in which it invests. The next step would be to move forward with divesting from the companies.

“If you want to divest, you have to start somewhere,” commission President Victor Makras said. “Our mere size and name brings something to the engagement process.”

[…]

“There is some urgency,” Supervisor John Avalos, who has led the charge, told the board. “We have to take into consideration the real (climate) changes that are happening overnight.”

The counterargument is that stocks of fossil fuel companies are a component of most major index funds, and divesting from them could limit pension-fund revenues that pay for the retirement benefits of thousands of city workers.

“I don’t think I’m in a position to do that,” said Commissioner Brian Stansbury, the only one of seven board members to vote against moving to level two. Stansbury, a San Francisco police officer, expressed concern that moving the money out of fossil fuel assets would be “financially risky.”

The San Francisco Employees Retirement System manages $20 billion in assets.

 

Photo by ilirjan rrumbullaku via Flickr CC License

San Francisco Fund Delays Hedge Fund Investments Again

Golden Gate Bridge

The San Francisco City & County Employees’ Retirement System (SFCCERS) decided earlier this summer to invest 15 percent of its assets in hedge funds. But the fund has never invested in hedge funds before – and some board members aren’t on board with the plan in its current form.

So, for the second time in three months, the board delayed a vote on the hedge fund investments. From FinAlternatives:

The $20.6 billion public pension delayed a vote on a planned $3 billion hedge-fund allocation for the second time last week, Pensions & Investments reports. The board first put off a vote in June.

The planned alternative investments allocation has become a source of contention at the San Francisco fund. Board member Herb Meiberger has vocally opposed it, going so far as to seek—and win—the support of Berkshire Hathaway chief Warren Buffett, who urged the pension to use index funds rather than hedge funds.

Meiberger remains the only board member in certain opposition. But the other board members appeared open to joining him, as well as to supporting Chief Investment Officer William Coaker, who has championed the plan. Coaker presented a detailed report to the board on Wednesday, but his fellow members demanded still more information before voting to table the matter for another 90 days.

The key issue for board members seems to be the specific allocation of the money. Board members wanted to know, specifically, what hedge funds were to be invested in. But that information wasn’t available.

The board will vote again in early December.

Photo by Kevin Cole via Flickr CC License