San Francisco City & County Employees’ Retirement System approved changes to its environmental, social and governance policies, including the addition of oil and gas and thermal coal companies to its restricted investments list.
The $36.6 billion pension fund’s board approved the recommendations by Andrew Collins, director of ESG investing, and Blake Broadnax, investment officer, ESG investing, at its Dec. 11 meeting as a result of their annual ESG review, a spokesperson said.
Among oil and gas companies, the staff, utilizing MSCI ESG Research data, recommended adding Civitas Resources Inc. to its restricted list. As of June 30, SFERS had about $754,932 invested with the company that is subject to divest.
As of that same date, overall publicly traded oil and gas companies accounted for about $227 million of the pension fund’s assets, or about 0.6% of SFERS’ total portfolio. Overall, pension fund staff has identified 38 companies that are identified as high risk and are on the pension fund’s watchlist. Among that list are six firms identified for priority engagement based on SFERS’ net exposure to the companies, previous engagement efforts and their presence on the pension fund’s 2023 watchlist and priority engagement lists: Chevron Corp., ConocoPhillips, Exxon Mobil Corp., Occidental Petroleum Corp., Petrobras and Suncor Energy.
Civitas Resources joins Baytex Energy Corp., Expand Energy Corp. and Verne Inc. on the pension fund’s list of restricted oil and gas companies.
Among thermal coal companies, staff recommended adding Kinetic Development Group Ltd. to its restricted list because the company derives more than 50% of its revenues from thermal coal mining, as well as African Rainbow Minerals Ltd., Siam City Cement Public Co. Ltd., and Sumiseki Holdings Inc. because the companies derive between 10% and 50% of their revenues from thermal coal mining and have no plans to exit the business. SFERS is not directly invested in any of the companies.
Staff also recommended removing Allete Inc. and Jastrzebska Spolka Weglowa SA from the restricted list because the two companies now derive less than 10% of their revenues from thermal coal mining.
SFERS has a list of 56 companies restricted because of their thermal coal involvement.
Among U.S. tobacco companies, staff recommended removing Mativ Holdings Inc. from the restricted list because the company is no longer involved with tobacco production or distribution. The removal brings the restricted list down to 18 companies involved in tobacco production or distribution.
Collins and Broadnax had no recommended additions or removals to restricted lists for firearm companies or Sudan-related companies.
