San Francisco City & County Employees' Retirement System added 17 names to its list of restricted thermal coal companies as part of its annual ESG review, confirmed Darlene Armanino, executive assistant and board secretary.
Of the 17 companies added to the list, four — Foresight Energy, GEO Energy Resources, New Hope Corp. and Yang Quan Coal Industry (Group) Co. — were added because they derive 50% of their revenue from coal.
The $26.5 billion pension fund's addition of the other 13 firms was based on expanded criteria the board approved in October 2018 for companies that generate between 10% and 50% of revenue from thermal coal activity.
SFERS staff had originally sent letters requesting engagement to 18 companies that MSCI had identified has having 10% to 50% of revenues from thermal coal mining, in which SFERS had a total of $22 million invested in separate accounts and commingled funds as of June 30.
Of those 18, staff was able to engage with five companies to understand whether those companies plan to reduce or eliminate their coal assets and did not divest from them: African Rainbow Minerals, which is just at SFERS' threshold for divestment at 10% revenue coming from thermal coal; Anglo American, which a presentation said expects to reduce thermal coal revenue over time; CIMIC Group, which has no direct ownership of thermal coal reserves; Jastrzebska Spolka Weglowa, which plans to reduce its thermal coal business segment; and South32, which is actively divesting thermal coal assets.
Of the remaining 13 companies, all of which SFERS plans to divest, the one with the largest amount of SFERS assets is China Shenhua Energy Co., at $2.5 million.