work through to have the goal of bringing to the retirement board conceptual be start to finish of our business practice e f g policy for the boards consideration this is objective without direct staff recommendation because under the social investment policy that is a decision of the board however, we believe that if the board should decide inform engage at level two to take all the recommendations and we'll be willing to bring back a timeline to you if this is adopted and that we can go forward alters level 2 if that's the boards desire i'll be happy to answer any questions. >> okay. great open up for questions at this

time. >> there you go. >> in the level to engage with the motion in the book. >> uh-huh. >> it is including the staff having to report back on a semiannual basis don't i think this is too infrequent to report back to us. >> it's the boards pleasure during the off seen e assault weapon when milestone my executive director report we provided a report that we placed in the last but obviously we can this board pleasure how often you want us to report back. >> we can amend that accepting the motion and obviously if we wanted to dig into this on a

hearty basis taking more staff time and we'll have to wait for the board to accept the motion do you think if we want to be as active as the board members expressed to me it it will require an additional staff person or i think the gentleman who came before us i think calpers said it takes a quarter of his time what is the timeline for one of our staff people. >> time wise the 4r5789 i was here and some of the staff were here when we undertook the same engagement for sudan the letter writing we sent letters and followed up and determined and recorded back to the board with reopens that will entail staff

time i don't believe that will need a full additional employee we also have positions in the budget we could leverage as far as compliance that are unfilled at this time we could make part of the responsibility to be monitoring the activities i will also stress it is not just staff for example, i nc r doesn't - they require board level involvement and participation in the committees they undertake a so we're have sufficient staff to do this i want to remind you that some of you might be called upon or volunteer to participate in the positions by this group we believe again if it is the boards pleasure we have sufficient staff to support all

of the levels of level 2 or components of level 2 we're recommending. >> uh-huh. and finally in order 2 a the pro-active advocacy could we be more specific and actual address some of the issues or i think that commissioner avalos had good language in some of his recommendations like the awe leltd of the fossil fuel reserves or recommend keeping that broad. >> we have 90 outlooks objections if the board wants to identify the rules for the engagement we've read the board of supervisors resolution as to targeting specifically the cooker tractor 2 hundred companies without specifically you know whether it was a

business plan that addresses the potential of strantdz assets or basically you know disprejudice or bias of the potential to be strapped i've seen supervisor avalos language we can amend the proposal or the motion to include what the motion will be and the focus of our corporate engagement if we're going to do our own letter writing it's it depth risks or the other broader decision the board could direct the staff how to define that. >> following up if you don't minded commissioner the goals of the engagement versus 2 hundred companies another way to look at the rate 2 hundred companies or the top 10 are and i would think

that an engagement would target certain companies differently and rating them sort of a the versus out of the at least of the 2 hundred will help to focus our campaign and make that more effective. >> we spoke about that prior to be able to analyze the most egregious of the fossil file impact would be great we can't do that with we look at advocacy but if we have you analysis that and came back to us and of those areas who is the most e entrenches that will be more effective. >> we'll need some guidance who is the worst offender the person that has the most carbon in the ground with no plans to use it

or those who are using it without abandonment but not in the top 10 holdings we'll work through the committee or the board directly to define our goals in trying to define or to target specifically the worst offenders among the group out of the 2 hundred i forgot how many companies we currently hold let's see here - . >> jay with the entities 19. >> 69 out of 2 hundred and general targeted letter writing i think the coalition from the i nc with the coalition you know have i've provided samples of the letters they've written that require the companies respond

back so we can definitely work with the board to - ami to say attack it. >> be more specifically and yes. >> exactly. >> next go ahead professor. >> good afternoon, everyone thanks for coming i'm sure you're interested in the fossil fuel issue a couple of issues we talked about did number of the companies going back to commissioner paskin-jordan comment in terms of focusing which companies i was at a conference last february 11th actually last month and unless a member of the commission, the public, or staff so requests percent spoke they have a focus list of companies hair targeted in turn of trying to engage them this makes sense to do that because obviously we

have a certain amount of resources another point from calpers a standard in terms of the stakeholder issues one of the issues of engagement is boating our shares just to put this in context staff wrote a memo to the board dated 2013 it was nicely written in terms of level 2 promoting the social rights and interests they proactively promote activity and were in concert to insure the roshgs recognize with the goal of influencing activities they may be initiation of the stakeholders policies so that's level 2 on the agenda for today which i support and actually asked to be calendared for

action. >> one of the key issues to partner with other public pension funds one thing that came out in terms of stakeholders putting a proposal on the companies stakeholder vote there's a new tleerld 3 percent ownership and hold the shares for a 3 years for the stakeholders to put something on the proxy foet vote now we can't have a direct role in terms of the interests in regards to the fossil fuel companies one issue that was discussed how do we flush out the issues we're looking for cal spurs made a inessential

presentation it makes sense in terms of what we do they start off by saying it's stewardship that cal conspiracies and other pension funds are long term stakeholders that are long term assets we have the responsibility for the stewardship of our those assets cal conspiracies calls that a stewardship for engagement it is appropriate for us the principles ♪ document not only guide cal stirs voting activities but establishes a fraction for good corporate framework the transparency of the new life tenant we that that is important to talk about the engagement of the companies in which we invested those are the substances they have various clauses in terms of managing portfolio companies and from the

fossil fuel companies there is got to be engagement we we believe is socially responsible it benefits the people in the long term we talk about the oil the vietnamese did he see my brother goes to valdez, alaska a lot i will not go to an exxon gas station actually we stated they hotel that the captain was it hazel >> captain cook in oorj. >> not captain in the rig that ran awe ground. >> let's talk about the un pr you are we prepared to join that can you discuss the costs in

joining the un r example pr i the united nations public what is it - >> the united nations principle for responsible investment. >> the un pr can you describe what the 6 principles are are we ready to join that organization and do you want their principles. >> it would be an action by the board to see if they want to engage the cost is in the range of 65 hundred to $7,000 to join lined up associated with this engagement you become a significant for of them and we have to there's a reporting requirement back to the organization as to how we implemented each the promises if you would like we've provided a

copy of the principles i'll read them out loud as far as are we prepared to enter yes we have money in the budget to pay the fee but it needs to be a discussion it's a commitment but the board as well as staff that we will adapt and implement the 6 principles of responsible investment first, we'll incorporate the s g policy and the decision-making process that is part of the making the committee i believe role is to from start to finish before we invest we investigated any e s g issues with the manager our counter policy addresses the fact if we find someone we're have found in what we determine to be bad behavior how to deal

with that that's a commitment to do you want an espn policy i building by the board and staff will support the board the second principle we've incorporate the issues into our policies and procedures that is similar to level one it goes beyond the environmental issues and social and governance issues principle 3 seek appropriate disclosure by the entities in which we invest which will be at the beginning before we invested the money ask them to disclose their e s g policy and their track record in those areas the fourth have the acceptance and implements between the investment industry

while try to get other foengz folks we're socially with in the investment industry to consider adopting those principles the fifth for the effectiveness in investing the promise and report on the activities asia progress towards implementing the promises that's the tag that you know we would be reporting back to the organization our accomplishments and our efforts for the year and they will be evaluated and recorded. >> okay. so any other organizations you've mentioned the c e r. >> yes. we brought forward the carbon asset initiative that is a focused 45 companies sort of a targeting approach they've identified as the most effected by potentially i know assets

they're holding and so those are the 3 that we're aware of we would you know have the board consider. >> okay first i want to echo commissioner paskin-jordan comment about the timely reporting i think i'll echo hearing her comments in terms of the number it is arbitrary in your report you mentioned one of the companies was not on the cooker 2 hundred tractor list my feeling this shouldn't be limited to a specific list maybe some are included in terms of prioritizing would that be reasonable prioritizing which companies with the offenders, if you will. >> it comes to the approach and the enroll setting if only to address issues tracking for gas

then we go to potentially companies that are beyond the cooker tractor 2 hundred list and identify those folks and they'll become part of the effort what is before us today is a specific request we engage the companies on the tractor 2 hundred but clearly the board can define the goals that expands the unifies we'll be trying to deal with. >> i mean, i'll be in favor but it 140u7b9d e shouldn't be limited to the list this year companies beyond that how do you suggest that. >> the i f f has a definition of what they cancer climate risk proposals before companies a that might come before a company that wouldn't have the asset to get on the tractor 2 hundred

list we'll under level one obviously still be inclined to vote in favor of things more transparent so level one take care of the companies not not on the tractor 2 level if we decide to see a - it would be a manufacturing company that happens to have a climate issue wouldn't make the list but the e s g policy allows the board at any time in addition to this engagement of tractor 2 hundred companies to look at others. >> we don't need to modify the lapsing for the companies not on the list. >> okay. good.

>> thank you thank you very much good afternoon. i have a couple of questions have we ever been a member of the inpr i. >> no. >> when i look at it from a historical prospective of past engagements we've got now we have a total of 8 given the carbon tractor 2 hundred companies being on the list so prior to this alex action we're discussing 7 previous ones for the public just to let them know employment stakeholder voting within september 1988 and the corporate activities shall be in compliance with a level one stakeholder voting and in

september 1988 another community regulations level one stakeholder voting and corporate governing in international affairs level one 1988 ic brighten principles and adhere to the operations in northern ireland that was a level one stakeholder voting that was february 25, 1992, the sixth one is the tobacco divestment it has a level 3 investment which is finalized on october 3rd, 1998, and just to give you a brief description of the tobacco divestment due to the mitigation and probably governmental restrictions relating to the abstract industry the system will not invest isn't income

security companies manufacturing tobacco products how long did is take us to get to a level 3 on this issue. >> i'm not fume with the issue i think a couple of commissioners, if they have a recollection. >> i'll make one more point another in divestment with the sing a song full of the faith that the dark past has taught us dan investment the retirement board directed staff to engage in the constructive dialog with companies in sudan the government to come pilot in level 2 in june 2006 so out of our boards history we've had one example of a level 3 many years

ago in 1998 i'd like for someone to research that and how long did the steps take to get us to level 3 and the other question i have is b there a financial clock to be members of the united nations promises. >> the adduced are 65 hundred to 7 thousand. >> is that models or yearly. >> you pay that once. >> we don't have to - >> ever pay it again i hope it is to sign on to the principles that basically brings you into the group it's a fee. >> tells you that to recap what

i'm exactly looking for and staff to come back and tell us what it takes to get to a level 3 for the tobacco i want to have a chronological order when did it begin thank you. >> hi i have a couple of questions. >> thank you. >> from american people investment policy foreign policy prospective our primary objective and i as i understand to access the investment risk and make sure the investments we're making are prudent and sound in areas there are overlap with social concerns we have then the board is per policy

should look at those is that a fair assessment of our policies. >> that's one way of stating it i think that is fair the board needs to take into consideration the consequences of actions we would characterizations it as risk factors which is part of our fiduciary responsibility to be analyzing those also. >> so when i look at level one i see all the proposals that we voted on throughout our proxy ss and a lot of the same things are voted on by the investor climate risk of c ncri building there is

a lot of overlap. >> yes. >> so in a sense we're doing level 2 indirectly a much smaller less direct way not direct engagement just as you as a proxy but in some instances your ended up in the same place level 2 is engagement you do level writing we don't do we either introduce our own stakeholder resolution that is not have a part of a level one this is what the i nc r do by the way, as a group we'll propose the issues related to this those are not activities we're doing currently under level one that is the engagement part either individual letter writing as a group, united

airlines with other folks with similar interests to introduce the stakeholder proposals just part of level two engagement and the third part is the substance that provides at level 2 short of divesting you can invest in certain programs that address the environmental issues as long as you believe they're going to bring equal returns with equal risks that's not deinvestment but a component of the level two definition that was adopted by the board in 1988. >> let me say that another way under the curling current level one policy it is the way advertised the same way that i nc r is probably voting on some

policies. >> i'll assume the grossly goals would be the same because they're actually not voting as a block but individual proxy so their proxy is similar to ours i 0 could say they're exactly the same. >> i'm gentle listing according to the there was a total of 45 proposals and 39 were against management. >> that's correct. >> who what would be interesting of the 45 you know how many were actually passed how many were you know is this getting transaction with management that is an important dictated point to look at anytime you have an investment strategy whether you're putting

money somewhere or looking at policy i that that is important once you implement that to track it we're basically one year into this now. >> yes. >> do you think that i have a question we're a year into that looking at 45 votes is that enough the time to track to see if this is successful? >> well, i think we have recorded back to the board at the request of the board whether our votes were the majority of the votes and a lot of those issues are new issues their i think gaining transactional and increasing most of them i would say were not successfully couped that is the pattern and it takes a long time the first time you get 15 percent of the vote and the next time 26 percent we

recorded back how many of the votes were on the side of a prevailing vote and i mean bob can speak to it but generally speaking those types of resolutions are gaining in strength and i think that there is very few of them have been successfully adopted by the companies how to measure process to answer our other question it is slow proxy seasons lasts 7 or 8 or 9 months every year the deadlines for your simulation is very, very slow we've not seen our action of level one changed the proxy vote we believe that our proxy policy was already in line