The San Francisco Board of Supervisors (SFERS) passed a unanimous resolution this afternoon calling on the San Francisco Employee Retirement System to divest over $583 million invested in the 200 corporations that hold the majority of the world’s fossil fuel reserves.
The resolution makes San Francisco the third city in the nation after Ithaca and Seattle to push for fossil fuel divestment. If the SFERS Board agrees to the Supervisors’ request, it will become the largest pension fund in the country to divest from the fossil fuel industry.
“Divestment is an important part of our city response to climate change,” said Supervisor John Avalos, who introduced the resolution.
The San Francisco Employee’s Retirement System (SFERS) is a roughly $16 billion pension fund that serves more than 52,000 active and retired employees of the City and County of San Francisco and their survivors. According to SFERS Executive Director Jay Huish, the fund currently owns $583.7 million of public holdings in 91 of top 200 fossil fuel companies. Some of SFERS’ largest fossil fuel holdings include $112 million in ExxonMobil, $60 million in Chevron, $26 million in Shell Oil, $17 million in Occidental Petroleum, and $11 million in the China National Offshore Oil Corporation.
The push for fossil fuel divestment is part of a new national campaign, Go Fossil Free, that is modeled on the 1980s movement to divest from apartheid South Africa. The movement has spread to over 100 cities and 300 colleges and universities across the country. Four colleges, Unity, Hampshire, Sterling, and College of the Atlantic, have committed to divestment. There are also active campaigns on every University of California campus. Earlier this spring, UC Berkeley’s student government voted to divest their $2 million budget from fossil fuels.
In San Francisco, the divestment campaign was led by 350 Bay Area and the national 350.org campaign and supported by groups including SEIU 1021, SF Bay Chapter of the Sierra Club, Rainforest Action Network, Center for Biological Diverstiy, and more.
“San Francisco’s commitment is a big victory for the burgeoning fossil fuel divestment movement,” said Bill McKibben, founder of 350.org, one of the organizations helping lead Go Fossil Free campaign. “The Bay Area will spend billions adapting to climate change–it makes no sense at all to simultaneously invest in the corporations making that work necessary.” Allowing global warming to proceed unchecked could have a devastating affect on the Bay Area. A recent report by the San Francisco Bay Conservation and Development Commission found that a 55-inch sea level rise by the end of the century would put $62 billion of Bay Area shoreline development at risk and require at least $14 billion worth of static structures to protect California’s shorelines.
The 200 fossil fuel companies targeted by Board of Supervisors resolution were chosen because they control the vast majority of the world’s coal, oil and gas reserves. According to top scientists and analysis by groups like the International Energy Agency, nearly 80% of those reserves must go unburned if the world is going to keep global warming below 2°C, a target that the United States and nearly every other country on Earth has agreed to meet.
SFERS could face a potential financial risk by staying invested in the fossil fuel industry, according to a new report by market analysts at HSBC. According to the report, if countries agree to meet the 2°C target and pass regulations strong enough to keep 75-80% of known fossil fuel reserves in the ground, the write off of those reserves could cause loss in market value of up to 60% for fossil fuel companies like BP, Shell, and Chevron.
On the other hand, according to a new report by the Aperio Group, a group of financial advisors based in Marin, fossil fuel divestment poses would increase portfolio risk by a roughly 0.01%. The report’s lead author, Patrick Geddes, told reporters on a recent webinar that, “Statistically, it’s basically noise.”
After today’s vote, divestment advocates will be following up with the SFERS Retirement Board to make sure that it pursues the divestment goal in a timely and responsible manner, as well as continuing to educate San Francisco residents about the importance of the move.
“This is a big victory today, but it’s just the beginning of our campaign here in California,” said Jamie Henn, 350.org’s Communications Director and a San Francisco resident. “We’re looking forward to extending this effort to cities across the state and supporting the growing student movement on campuses. We’ve financed the fossil fuel industry’s destruction long enough, it’s time to invest in the future.”
Why Divest from Fossil Fuels to Address Climate Change?
Being an entirely new situation, we don’t have precise examples to draw upon for solutions; but we do have similar situations that can give us inspiration. One of these is the dismantling of the racist, discriminatory process of apartheid in South Africa, that Episcopalian Bishop Tutu has said came about for two reasons: 1) protests within the country and 2) divestment outside the country – divestment from corporations in South Africa. These two together broke the back of apartheid. One example of this latter would be what may have been the largest divestment action by any single parish in the United States when, in February of 1986, Trinity’s vestry voted to divest holdings of about $100 million.
We have left the Holocene Epoch and are now in the Anthropocene Epoch, meaning man or person-made. Our activity has changed and interfered with the way this planet was designed to operate; and, whereas change is part of the natural order, unnatural order – extreme change – goes beyond what the planet can tolerate and still support life as it is now. We don’t know exactly where we are in this process; but we DO know we have disrupted earth’s natural system of protective atmospheric layers by putting excessive amounts of carbon dioxide – fossil fuels – and methane into the atmosphere causing a greenhouse effect, or, global warming, more gently referred to as “climate change.”.
Although this fact has been known for decades, it is only recently that over 95% of all scientists globally agree that this earth warming is due to the burning of fossil fuels.
This being the case, it behooves each and every person, organization, corporation and government to do what can be done to remedy this situation by reducing or eliminating their use of fossil fuels. We have already seen warning signs of earth’s having reached its limit to absorb carbon dioxide: melting polar ice, rising sea levels, ocean acidification, dying coral reefs, flooding, drought, extreme weather events, fires, food, water shortages.
In addition to the long list of things we do to reduce use of fossil fuels - walk or bike; use public transportation; make our homes, offices, places of worship and all buildings more energy efficient; use smart power strips; unplug electronics and small appliances when not in use; use energy saving light bulbs such as LEDs; create and observe our own low or no fossil fuel usage times/days weekly; eat less or no meat; buy locally with few miles on the produce/products; start your own gardens for herbs, vegetables, flowers – if only in containers; use airplanes only if and when absolutely necessary; if you must own a car or other vehicle, make sure it is a high MPG vehicle, such as a hybrid; support legislation that creates sustainability, protects us and our environments, creates green economies, supports development of renewable energy, bans pollution in all forms, supports local, clean development, creates permanent, green jobs – in addition to all these and the many more things we do to reduce use of fossil fuels, HUGE DIFFERENCES in the amount of CO2 we are putting into the atmosphere are needed urgently, if we are to avoid the climate cliff. Everyone‘s help is tantamount to the success of this major undertaking.