Pension Divestment Policy Wrong Fit for San Francisco

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Following up on our December report “Rhetoric without Reason: The Dangers of Divestment” PACE wrote to the San Francisco Employees’ Retirement System Board to oppose the adoption of a divestment policy in a vote scheduled for January 24. 


Dear SFERS Board:

I would like to express my opposition to the Board’s consideration of a policy related to fossil fuels divestment at your special board meeting tomorrow. I have enclosed, on behalf of myself and the Partnership for Affordable Clean Energy (PACE), a recent analysis and report on how divestment from these funds can have harmful effects on pensioners and the importance of upholding your fiduciary responsibilities.

PACE is an organization devoted to fighting for fair and responsible energy policies. Formed in January 2009, PACE believes that the national conversation about the future of energy must include discussions about the cost of energy choices, as well as their benefits, and how they affect consumers.

In December 2017, PACE released a report focused on the examination of divestment from fossil fuels. Our findings demonstrate the critical need for regulators, lawmakers and consumers to understand that the spread of energy divestment is an inappropriate solution for tackling the challenges that lay ahead as we look toward opportunities for keeping up with our energy consumption and use. Divestment threatens pension beneficiaries, consumers, investors, and may even deter leading energy companies from pursuing sustainable energy projects.

The Department of Labor also advises, “®he primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses.” It is fundamentally dangerous to subject pension holders to the shortsighted goals of revolving legislators, community activism, or government bureaucrats.

When rhetoric overtakes reason, the chances for adverse decisions increases exponentially. Social divestment from well-performing stocks is irresponsible – and runs contrary to one’s fiduciary responsibility. As an appointed official, whose first responsibility is to pensioners, your action on this issue is held to a higher standard than that of the advocates who rarely have a financial stake and are more concerned with “winning” the issue. Your focus should be that of San Francisco’s public employees who after years of service deserve the most financially secure retirement possible.

As with many ideas and trends based on rhetoric and emotion, the best antidotes are sunlight and facts. PACE will continue to highlight the dangers of divestment and it is our hope that you will honor your fiduciary duty to the pensioners you serve by voting against divestment at the January 24 meeting.

Enclosed is the aforementioned report “Rhetoric Without Reason: The Dangers of Divestment.” Please do not hesitate to contact me if you have any questions.


Laura Schepis

Executive Director


[i] United States Department of Labor, see