Spurred by concerns about climate change and a grassroots push from Palo Alto's faith community, the City Council enthusiastically passed a resolution Monday urging the California Public Employees' Retirement System to divest from fossil-fuel companies.
The council voted 8-0, with Councilwoman Liz Kniss absent, to go along with the recommendations of a colleagues memo issued last week by four council members. The memo by Marc Berman, Patrick Burt, Mayor Karen Holman and Kniss recommends that the city officials request that CalPERS divest from fossil-fuel companies and frames the issue as one of both environmental and fiscal responsibility.
The city's resolution urges CalPERS, the state's pension fund for government employees, to "immediately instruct" its asset managers to stop any new investments in fossil-fuel companies; ensure that "none of its assets include holdings in fossil fuel include holdings in fossil-fuel public equities and corporate bonds" on or after Jan. 1, 2020; and publish quarterly updates starting in July 1, 2015, detailing progress made toward full divestment.
The quick council vote was greeted with applause by more than 20 people who attended the meeting to urge for the resolution. Several addressed the council before the vote to make their case for divestment.
"There is no longer any doubt that fossil-fuel emissions are causing sea-level rise, extreme weather events and drought-related crop losses," said local resident Debbie Mytels, co-convener of Peninsula Interfaith Climate Action. "So it's time for action. Pulling our investments out of this dirty industry is a very symbolic step in recognizing that we can no longer continue with a business-as-usual source of energy."
Local resident Susan Chamberlain also addressed the council and made an economic argument for divestment. As pressure to reduce the use of fossil fuels builds in America and in the international community, Chamberlain said, there will be an increase in regulations to limit carbon emissions and an increase in fuel-efficient technologies. The decrease in demand for fossil fuels would leave some of the existing technology as stranded assets.
"Not only is divestment from fossil fuels the right thing to do from a moral perspective, but it makes good sense from a financial perspective as well," Chamberlain said.
In their memo, the council members made similar arguments. Berman, the memo's lead author, said he was swayed by recent studies that suggest that divestment would not lead to a negative economic impact on the city and the pension fund. He also cited the more than 150 letters that the council had received before the meeting urging divestment.
"Our investments should reflect our values," Berman said. "That's what tonight's memo and resolution is about."
The city's action comes at a time when the movement for divestment is picking up steam at cities, colleges and legislative chambers. State Sen. Kevin de Leon has been leading the Sacramento push for a bill that would force CalPERS to divest from fossil fuels, and students and faculty at Stanford and Harvard University have been vocal in urging their respective schools to divest.
Councilman Cory Wolbach called the Monday resolution a "small but important step."
"Our voice joined with others may nudge CalPERS to divest," Wolbach said. "CalPERS' decision to divest may send a message to others."