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HomeMy WebLinkAbout09 - Investment Policy Update - CorrespondenceReceived After Agenda Printed September 28, 2021 Item No. 9 Re: Council Agenda Item #g Investment Policy Update September 26, 2021 Dear City Council, I'm not a finance expert, but you know I love to give my two cents. I've noticed a growing trend of companies and agencies divesting from not sustainable industries, such as fossil fuels. It's a bad investment as the chart below shows. And here are some of the big news in recent years: • In 2015, SB -185 (De Le6n) Public Retirement Systems: Public Divestiture Of Thermal Coal Companies became a law. • In 2018, SB -964 (Allen) Public Employees' Retirement Fund And Teachers' Retirement Fund: Investments: Climate -Related Financial Risk became a law. • In 2020, BlackRock announced it would ditch investments that it considers a sustainability risk. • In 2021, Maine's fossil fuel divestment bill became a law. Coal & consumable fuels N m Carbon Underground 200 m Oil & gas exploration & production c Integrated oil & gas ° o' Oil & gas refining, marketing & transportation Energy equipment & services Fossil -fired utilities (that burn coal or fracked oil & gas) Fossil Free California shows some Cities and Counties have divested from fossil fuels and certain banks. For a quick reference, Mountain View's Investment Policy has a section called "Prohibited Investments": 6.3.1 No investment is to be made in a company that manufactures cigarettes as identified by the Investors Responsibility Research Center. 6.3.2 No investment is to be made in entities that manufacture firearms as identified by the Investors Responsibility Research Center. 6.3.3 No investment is to be made in entities that engage in the direct exploration, production, refining, or marketing of fossil fuels. Can Newport Beach add a "Prohibited Investments" section in the Investment Policy? How about divestment from big plastics? We know plastic is a fossil fuel product. A Time magazine article in 2020 showed, "As [Shell] rethinks its business, it plans to expand in plastics... CEO Ben van Beurden considers the uncertainty facing his company over the next decade: souring public perception, shifting consumer behavior, the risk of becoming activist investors' next target, political leaders' bold promises to dramatically reduce emissions." I would like to hear your thoughts. Thanks! Hoiyin Ip Top io Largest Plastic Producing Companies ii Z. BASF sr�l�ic Th¢ Ch-1,*1 Compeny SER' Q MATSUI lyondellbasell I I III II C E*(onMobil pvt. lt:d. Source: Plastics Technology