San Diego County to divest of fossil fuel companies

News Date

Article by: Deborah Sullivan Brennan

San Diego County’s $13 billion investment portfolio will exclude companies involved in fossil fuel production after a unanimous vote by the Board of Supervisors.

The supervisors voted Tuesday to prohibit investment in “any corporation that engages in the exploration, production, drilling, or refining of coal, petroleum, or natural gas.”

Supervisor Terra Lawson-Remer said the action will “align our investment dollars with our County’s mission and values.”

“I think this is very historic that we’re taking action as a board to say that we’re not going to be investing in any more industries that profit from destroying our planet, that profit on the backs of climate change, that profit on the backs of really mortgaging our future for future generations,” she said. “We’re really going to say no to that and stop those investments in fossil fuels.”

The vote occurred in concert with other recent environmental actions by the county.

San Diego County is developing sustainability plans across all its departments. It also is updating its climate action plan and launching a decarbonization plan to cut the region’s carbon emissions to net zero through investments in clean energy and transportation. That could include switching to solar, wind and electric cars, and further electrifying buildings and identifying opportunities to capture and store carbon in natural systems.

The decision to ban fossil fuel investments allows the county to manage its money “while considering environmental, social, and governance factors in investments,” the board letter stated.

As the U.S. and other nations transition their economies to alternate energy sources, that reduces future markets for oil and gas, making fossil fuel investments a riskier bid, some experts say. Because of that, divestment is a sound fiscal choice, the board letter states.

“This prohibition safeguards the Investment Pool by precluding these investments in fossil fuels, which are viewed as increasingly risky, and by allowing funds to instead be invested in companies that promote environmental stewardship, which ultimately benefits the Investment Pool,” it states.

The prohibition applies only to future investments and is not expected to have a big impact on future returns.

“The Treasurer anticipates that avoiding these investments will have minimal or no negative future impact on the Investment Pool, and any potential lost opportunity could be offset with opportunities” in other sectors, it stated.

In any case, the county no longer has investments in fossil fuel companies, the letter stated.

The investment pool previously had one $5 million stake in Exxon Mobil, but the county treasurer sold that this month at a net loss of $1,850. Exxon Mobil’s credit rating was downgraded recently, the letter states, so the sale was justified on that basis as well as environmental considerations.

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