A Board of Supervisors member wants to end San Francisco’s financial stake in the company that made the weapon used in the Newtown, Conn., massacre as well as investments with fossil fuel companies.
Among the companies and funds into which the San Francisco Employees’ Retirement System invests its $15.4 billion pension plan is Cerberus Capital Management, a part owner of Bushmaster assault rifle manufacturer Freedom Group. A Bushmaster rifle was used to kill 20 students and six teachers at Sandy Hook Elementary School. San Francisco also invests in a still-unknown number of polluting fossil fuel companies, according to Supervisor John Avalos.
The supervisor introduced legislation Tuesday that could lead to The City divesting from fossil fuel companies as well as weapons manufacturers.
Rather than fund ventures that lead to pollution or violence, The City should invest with companies that “share our ?values,” Avalos said.
“We should put our investment power into companies that have a positive effect on our society,” said Avalos, adding that the funds should be put into ventures that “make real change.”
The City’s investment in Cerberus — which shortly after the Newtown killings announced plans to sell off its stake in Freedom Group — is less than $1 million.
But The City’s investment with companies that deal in fossil fuels is much larger. Initial estimates peg the retirement fund’s investments in fossil fuels at $1 billion, at least.
The retirement fund already has restrictions against investing in tobacco companies and in firms that do business in Sudan, which came after the genocide in that country.
In order to divest from a fund, The City needs to find another fund or company that will produce an equal rate of return. The average rate of return on The City’s retirement funds is 7.75 percent. A move to divest from Cerberus is “a no-brainer” and is already in the works, according to real estate investor Victor Makras, who sits on San Francisco’s retirement board.
That divestment could be made final by March.
Moving $1 billion out of fossil fuel companies and finding equally well-performing funds will be harder, but, “I’m confident we can place our investments in appropriate vehicles to yield safe, profitable investments while having a social conscience,” he said.