‘The Moral High Ground’: San Francisco Supervisors Vote for Fossil Fuel Divestment
San Francisco’s governing body voted on Tuesday to approve a resolution urging the city’s retirement system to stop investing in fossil fuel companies.
The Board of Supervisors voted unanimously to approve the measure, which urges city pension funds to immediately stop investing in oil, gas and coal companies and divest more than $583 million in holdings in the 200 largest publicly-traded fuel companies within five years.
Introduced by District 11 Supervisor John Avalos, one of the board’s most progressive members and a candidate in the city’s last mayoral election, the non-binding resolution cites concerns over climate change and the contribution of carbon emissions to global warming.
“The scientific consensus is that if global warming exceeds two degrees Celsius, it would have catastrophic effects on human life,” Avalos said at Tuesday’s board meeting.
“Divesting from fossil fuels is not just the moral thing to do, it is fiscally responsible,” Avalos added. “As climate change worsens, governments will eventually be forced to act.”
Avalos had earlier stated that the city should “limit our financial contributions to fossil fuels and instead promote renewable alternatives.”
The $15.6 billion Employees’ Retirement System currently holds stock in 91 of the world’s top 200 fossil fuel companies, including $112 million in ExxonMobil stock, $60 million in Chevron shares and $26 million in Shell Oil, according to the San Francisco Chronicle. District 4 Supervisor Katy Tang expressed some reservation about divesting such a large sum of the city’s retirement investments.
“That means we will have to go and prudently re-invest all of those securities, which… does come with some risks,” Tang is quoted in the Chronicle.
But the Epoch Times reports that Avalos believes divestment “would increase portfolio risk by only 0.01 percent.”
“The Retirement Board can divest responsibly without affecting the fund’s security or yield,” Avalos asserted. “This is a great time to make a statement about how we can hold the fossil fuel companies accountable.”
One other US city– Seattle— has taken steps toward fossil fuel divestment, with Mayor Mike McGinn requesting that the city’s two main pension funds “refrain from future investments in fossil fuel companies and begin the process of divesting our pension portfolio from those companies.”
San Francisco’s vote is the latest development in a national fossil fuel divestment effort called Go Fossil Free. The movement seeks to stop fossil fuel companies from exploring for new sources of hydrocarbon-based energy, end fossil fuel corporate lobbying for special privileges and secure a pledge from them to keep 80 percent of their current reserves underground forever.
While San Francisco’s vote reinforces the city’s reputation as “America’s greenest city,” District 10 Supervisor Malia Cohen cautions that the final decision on whether or not to divest lies with the Retirement Board.
“I just want to manage expectations,” Cohen is quoted in the Chronicle. “This is a non-binding resolution. There is a very thoughtful but fairly long and drawn-out process.”
District 6 Supervisor Jane Kim said divestment could take longer than the five years urged in the resolution, which also calls on the Retirement Board to release quarterly progress reports.
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