Story by Charlotte Dekle
Photo by Erin Lee
The City Council voted to approve an amended investment policy resolution aimed at cutting economic ties with ExxonMobil and Chevron at its meeting on Wednesday, Oct. 20. The investment and cash management focus remains unchanged except for the amended section detailing that going forward, the City will not hold investments in businesses that refine and/or extract oil or coal.
Each year the city must approve a fiscal investment plan, broken down by each month. Currently, the council has two fossil fuel investments, one with ExxonMobil and the other with Chevron. The bonds for the two companies were set to expire in 2024 and 2025 respectively, but the severing of these investments is the next step in the city’s climate action plan, aimed at reducing carbon emissions and a carbon neutral investment portfolio.
This amendment differs from a previous edition of the policy that only vaguely addressed the City’s fossil fuel-related investments by stating that they were not permitted. The change was made to narrow the scope of affected businesses, as opposed to the broad “fossil fuel related” category.
At the meeting, Interim Financial Officer Kenneth Louie conducted a presentation regarding the loss in accrued funds for cutting ties with these corporations, which came out to less than $1000, which then opened the floor for question and discussion.
“While I think it’s well-intentioned, it’s too much of a symbolic act,” Councilmember Jon Primuth said. “There are many companies that are diversifying and aggressively investing in renewables, even as they maintain fossil fuels. So by prohibiting investments in any kinds of businesses that have fossil fuel components, even though they may be rapidly expanding their renewable footprint, I [think we’re damaging] the city’s investment options.”
Additionally, Primuth argued that Exxon and Chevron had renewable operations and therefore should not be included in targeted businesses. Mayor Diana Mahmud, the Chair of the Clean Power Alliance, challenged this statement.
“If [Exxon and Chevron] are doing renewable, it’s not sufficient to scale.” Mahmud said. “Exxon specifically withheld information. They knew climate change was coming. They were happy going to the bank and reaping the considerable profits that they made.”
Mayor Pro Tem Michael Cacciotti concurred that the issue is nuanced, but took a more economic approach to addressing the concern.
“Chevron and Exxon had some of the lowest performing yields out of all of our stocks…It’s lethargic.” Cacciotti said.
An eventual vote resulted in the resolution passing with Primuth being the sole no. ExxonMobil and Chevron will be removed from the interest budget before next month’s fiscal approval at the City Council meeting on Wednesday, Nov. 3.