With the members of San Francisco Employees’ Retirement System set to meet to discuss, among other issues, the topic of divestment, members of Protect our Pensions took to the pages of the San Francisco Examiner to urge the board to consider the negative consequences to pensioners that such a decision would cause.
Carlos Solorzano, the CEO of the Hispanic Chambers of Commerce of San Francisco and Yolanda Hudson, a pensioner and a retired science teacher from Detroit, made the case that while divestment may grab the headlines, it’s not actually effective:
Divesting from fossil fuels to show that you care about the environment is certainly a great way to make some noise and create the illusion that you did something good for the planet. The simple truth is, not only does divestment not work effectively, but it also hurts the beneficiaries of those funds. Divesting doesn’t reduce the use of fossil fuels. San Francisco will still need oil and natural gas to function. As the late Joseph Dear, CalPERS’ former chief investment officer, once famously said, divestment is “a noble way to lose money.”
Solorzano and Hudson also highlighted the perilous financial state of the pension fund system to make the case that divesting from assets like energy stocks, which are stable overall, would be a mistake:
San Francisco’s municipal pension funds are certainly in no position to be able to lose money. According to a recent Bloomberg analysis, The City’s net pension liability has reached $5.5 billion. The amount of tax dollars that The City will need to pay into the system from our revenue fund will increase by 36 percent, three times as fast as the growth rate of San Francisco’s revenue. The costs of keeping the fund solvent will be “a significant budgetary challenge for the foreseeable future,” according to an S&P Global Ratings analysis.
Far from just critiquing divestment, Solorzano and Hudson pointed to things that the San Francisco municipal government could be doing to help the environment:
There is plenty that we can do as a city to reduce our carbon footprint. Encouraging more widespread use of solar power, investing more in building infrastructure to support widespread electric vehicle use and mandating industry-leading efficiency features in our buildings are all ways that San Francisco can limit its emissions. Divestment simply is not a viable solution. None of these are easy or politically galvanizing, but they are the right thing to do, as opposed to divestment.
Read the full op-ed here.