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 with voting on those

climate risk issues but we can't say that any of our votes changed because of level one engagement but a slow process to gain like you say transaction we're not a 3 percent holder in any of the stocks are we. >> you frowned on that anyway we're not in a position to meet the threshold if it is 3 percent but once and affiliate with the risk group suddenly the combined assets hits the threshold we've introduced resolutions and support resolutions as co-signers i'm sorry. i'm not

answering. >> we're not that far into that the proxy season is long i'll curious to know i'm sure we can't get an answer of the 45 proposals we can character some as being burdensome on companies like for costs and some less so i'll be curious to see how a character characterize them some changes are restrictive. >> of those that passed why did they pass and from american people investment prospective i know this is getting a lot of transaction from wall street so maybe something for staff but our portfolio is generally nor

active than not we generally choose managers that are actively looking at stocks have managers do i think they're looking at those kinds of things in terms of investment risks are they looking at climate change and cooker footprints? i believe they are i image they have been and i believe they are in making their decisions as to invest and like i said if we over lay a board policy we would be insuring and making them you know insure us their in fact taking those issues into account i believe they are >> i could extrapolate if you look at the global benchmark in developing the market the carbon tractor 2 hundred list i did a

check on it is 7 percent if you look at where we are as our equities portfolio and the portfolio on the top of page 2 realizing our chunk the portfolio is passively managed this is insight where our active managers are positioning themselves so looking at want 7 percent benchmark we're at four and a half at thees transportation will be with their p.o. box themselves away from the carbon records. >> followed by a factor that at least half once you strip out the indexing okay probably by at least half. >> that's reasonable. >> so in summary the things i

want more information before i vote for imagine and in some ways of the 45 proposals the 39 voted against management did they pass related to that i want to know more characterization of the proposals how burdensome it is important to understand those things i recognize this is questions i'm asking requires staff time commitment and you know i'm concerned as we pull staff away from others this is a small portion of our portfolio you know, i asked something you guys are trying to balance i'm cognizant there is on so much time in the day and staff resources are limited so i'll leave that up to you and granted

not all 45 proposals can be deseconded. >> we can provide the majority of what you're asking for in a short time. >> commissioner driscoll any questions. >> this is a suggestion does not underestimate how much staff time is being counted this is one time work once everything is up and running and adopted secondly the policies it's been brought up in the public and there's an issue about the metric going forward in terms of trying to listen to the objective of the board of

supervisors to be devisited in 5 years there's a metric some are non-quantitative that's a lot of work to go see if they have success at all that's another definition as for the history of getting to level 3 i'm not sure that went to level one but we can look at the opportunity income or loss there was from that because the city would be responsible and now the active members will be responsible for under performance considered insignificant because of our staff dollars. >> thank you for that account i would appreciate it if staff can come back to next month's meeting. >> sure. sure.

>> thank you i know we've spent a lot of time talking about dennis herrera divest we spent a lot of time researching the whole carbon free cooker footprints so our consultants a lot of times we city at the cool university level he i'll say in conclusion that what i was convinced of really the full deviewer in the plan while we struggle with research i support a fossil free san francisco and i know it takes time on the other hand to get people comfortable with the cooker footprint and the alternatives to investing i want to go back to you c i o and

their comments about the intricate i agree the states and you're correct in our percentages and most investments do i have programs you can invest in that provides opportunity for you i will ask staff to go back and look at it some of the seat managers footprints and what i mean alternatives and options because i think we should look at the options for the plan and like i know that we look at where we ever today and most pension plans have major steps to divest at least if not all of the portfolios we he'd those but i'll urge staff as well as my colleagues to look at this closely that is something we should look at the u mp r ii

that you mentioned 45 to $7,000 that maybe the initial costs by the we have to look at the budget there's a compliance issue that staff has to report and staff has to be in compliance every month and if you don't comply with the terms and conditions of membership then it doesn't benefit you that's a full staff person that's one thing to consider i'm not sure about the other 2 but what you get out of it is worth it in terms of isf they screen you don't capture every single thing it's a screening process for what you need and what you get is a great option but not the total option for the plan i'll urge staff as well as

everyone here to look at the first years in terms of how to look at the deviewer and look at the cooker free kind of portfolio moving forward thank you. >> i'll open it up - >> can i ask for clarifying question when you say investment managers were you incorporating both. >> both sides and both keel with the kind of i've seen both sides. >> great the chair will be open to a motion to speak to something. >> i'll move we adapt the level it. >> does your motion include both items that staff outlined

level 2 plus the compliments. >> yes. thank you, mr. president. >> is there a second. >> okay discussion on the item. >> go ahead commissioner. >> i'm not to vote against it the reason i'm going to take a step back a year ago my recollection is i proposed level one and made the motion and the board voted unanimously for it i'm not against level 2 per say there needs to be a murder - an incredulously there should be more questions asked and amongst

the proposals why did they pass or not did level one be successful how do we determine whether it's been successful or has it not been successful before we as a board decide to commit the beneficiaries money we need to understand what we've done so for and not a good use of everyone's time or has it fall short why has it fallen short what do we need to do it make a more effective if that answer is level two so be it we're not there north yet it feels looking good to vote for level 2 but as a fiduciary i'm not in that position to do that i know i have a lot of american royals members that come up to

me on a daily basis and their primary concern is their contribution rate they're really worried about the contribution rate is it coming down i don't think everyone doubts socially whether or not divesting from tobacco is risky but a cost associated with that i think those are things we need to understand at the end of the day when we look at stocks in the cooker index it is really about risk all about assessing risks because investments that are risky not a lot of disclosure maybe intend not to be good investments reducing risks we're talked about a lot if you look at industries that are we'll call them defense and tobacco and gambling and alcohol they've outperformed the market

as a whole over the last decade plus and the reason is because the theory is that people don't want to go near the stocks for social reasons there's a consequence it distress prices and they've outperformed that is one theory i'm not saying this is the case we need to look at this more closely there's questions that have been asked that should be answered my vote is no. >> anyone else. >> commissioner driscoll. >> i'll be vociferating but we'll come down to divestment or not divestment but till engaging the company this is a cost for staff time we're understaffed on the investment team but the

metrics were going slower that's why when we get to the level 3 many people are demanding us to do that that's a totally separate issue and much harder line for the fiduciaries again in our costs. >> i will support the item i actually think it's a good idea to engage at the end of the day being an active participant or owner of the company is a better way to operate i'd like to see and i know that staff will come back with the recommendations or summing up if there's a good quarterly report we'll become a member of the unpr i we'll create a list of cost offenders and going to do

commissioner bridges it would be hard to do a global for the principle i hope you guys each reach a decision on 2 had had keypads and charge that off the impacts on return decide how long to move over if we did a smooth transition if i can pick the worst offender we have to start somewhere i want to balance the people that are seeing in the interest of saying yes, we will all be able to feel a little bit better and speak to one company and our economic impact that will be something i'll look at so the list of offenders is a great risk to me

our mere size and name bring something to the engagement field if we step over the line and actively engage that 3 percent 3 years means a lot if we were to put something in front of a come the san francisco name and our strength and size would get the keypads to look at us differently than a person like replenishing has one share maybe in a lot of them (laughter) and we're a fixed leader san francisco is a capital aged city we know how to do negligence if we choose that engagement we'll be the first to make changes i'm happy to have that discussion but it is going to be very, very

careful and noted a broad approach maybe best i'll start with one i'll open up to public comment on item 4. >> vice president. >> hold on hold supervisors before we get started i also want to say i'll be supporting the stem and the advocates have done a good, good educating the members of the party and the public members of the public to staff i appreciate you for being flexible and open to consultant our questions and providing thoughtful responds earlier in the discussion supervisor not supervisor commissioner paskin-jordan mentioned something about enumerating some of the staff recommendations i want to make sure we don't glance over this

i'm not sure what you had in mind it was not part of the motion made so maybe we can go back and redo the motion - yes. >> you're going to make the motion jay. >> i was going to say the motion to be acknowledged amendment to get the companies to e retail. >> that was his suggestion. >> real quick do we need to take a vote. >> the inclusion i'll accept that. >> i'll accept that as an additional to the motion. >> can i sigh one more thing. >> second.

>> i thought that was interesting when you noted noting that stanford specifically devested if the egregious the coal companies so there are many forms of that we can start so by doing that that makes a statement and i think as far as the impact that will make a statement on the most egregious but in saying that one thing we have to realize is that stanford is not doing this from a pension fund as a fiduciary duty to the pension folks there's a different duty if we do this again, we want to follow the standards we have to make sure that it won't again have a significant impact on the plan and lose value the timing

of it there are many factors i think that the staff have to come back and look at i looked at the evidence it was pretty interesting over a 10 year period the fossil fuel mc i index you can you know add to that that it actually outperformed combiblth in a longer than period of time it underperformed looking at the time periods today the fossil fuels are much cheaper if you invest in them today and keep the investments the way it is now let's say with awe question they're a likelihood it could go up but taking a longer than

history of performance i'd like to look at not short sectors one of the things we want to look at we want to give it the period of time that is sufficient to really understand the track record if the board walks in and does this and coal and oil stocking stock and things go up and there's a huge under performance we have to have the ability to stick with it over time and sometimes that board has that inability to do that so we'll look at the statistics and holy narrow it down to the egregious like the stanford has done the endowments have done better and understand how they've uses the program i know that 350 out there, yes they

said that jeremy grant foundation was probably one of the most progressive in this area so we may want to take into account other institutions or foundationss that have been more forward-looking maybe we create our own fund that may take some time i want to have the patience and do this the right way thank you. >> public comment supervisor we'll take you first thank you for joining us once again. >> thank you it's really great to be here commissioner makras and i'm supervisor avalos a member of the board of supervisors been working with many community

stakeholders the 350.org to put together divestment in follows actually fuels we're talking about change it didn't happy overnight we are trying to move towards the traditional change we're seeing the world change around us the real impacts of climate change are hitting places over the world we're in a drought the worse drought and seeing hurricanes in new york and new england's and in the philippines we're starting to see a new era of fossil fuel our investments over the 20 years we're looking at 20 years back when climate change was not the reality now it is we're seeing it in the market continuation the urgency but we have to take

into consideration the real changes that are happening before our eyes i appreciate the discussion on level 2 engagement i think this is the right place to go we'll be urging you to go last year and got to level one but level one is not going to older e yield what level 2 will yield in terms of what we're doing in engagement so i want to urge a name vote to be able to get to level 2 that's where we're going to see the biggest difference i appreciate commissioner paskin-jordan about the language of the effects of 12r57b9d assets there are other meat to put on the bones that can operation lists what that means we want to show that companies are are considering

the science of climate change they're developing the search for more fossil fuel when it comes down the assets are unburnable so to search for more we want to make sure there's a commitment for new business models that didn't rely on burnable fossil fuel i appreciate that there's a sense we need to hear back you know on a periodic bays boos i think quarterly makes sense if you're ready to do models that's great but quarterly is better we can have discussions to look at proxy and look at it what we've can you think to see if we step up or go to level 3 i think the pressure view will provide the

guidance for staffing moving forward and so i do appreciate the discussion i'm hoping we can go to the next level put a little bit more meat on the bones to insure we're doing the best job in engagement lastly i appreciate the discussion about joining the unprinciple of investment though to join others retirement board ethnics in their efforts around level 2 that will make the police of san francisco power in and of itself that can lead to other efforts around the country as well thank you. >> thank you, supervisor for joining us. >> next speakers i'll call out

3 (calling names). >> hi, i'm janet cox with fossil free california i want to clear up a few things that may not be perfectly clear proxy access is on the process for calpers to be able to nominate board members to a company if you have held 3 percent of shares for i think it is 3 to 5 years in order to put a stakeholder resolution you only need to own $2,000 worth of shares this is the fcc will and important to understand the difference so there are a couple of recently examples of stakeholder resolutions put forward in this

area awe june capital and as you've proposed a resolution to exxon mobil they return some of the profits to find the stakeholders unitarian association and the presbyterian church usa have proposed a stakeholder measure to chronicle phillips they tie their contemplation to the value of their proven reserves both of the proposals have been rejected baselines the fcc rulings that the company can at their own discretion refuse to accept a proxy that there are many reasons why a company