On Thursday, December 18, the Legislative Policy Committee will hold a special meeting to provide direction regarding the City’s Investment Policy position on Socially Responsible Investing (SRI) and Environmental, Social, and Governance (ESG) considerations. The session will specifically address a proposed resolution calling for the divestment of City funds from entities involved in or associated with genocide.
The Proposed Resolution
Attached to the meeting agenda is a “Resolution of the City of Pasadena to Divest from Entities Involved in Genocide,” submitted for review by Councilmember Tyron Hampton. This draft resolution cites United Nations reports regarding military campaigns in Gaza and calls on the City to audit its accounts and divest from companies “profiting from, or sovereign entities engaging in, the atrocities taking place in Gaza.”
The resolution explicitly names Boeing, Chevron, and Caterpillar as examples of companies from which the City and the Pasadena Fire and Police Retirement System (FPRS) should divest. Additionally, the proposal would require the City to offer “genocide-free options” to employees for their 457(b) retirement accounts and avoid purchasing goods from companies involved in genocide.
Historical Context: The 1988 Precedent
To provide context for this discussion, City staff has included historical documents regarding Pasadena’s 1980s divestment from South Africa. Contrary to reports that the committee is currently reviewing an ordinance to amend the municipal code, the agenda includes a 1988 ordinance solely as “Attachment E” to illustrate how the City previously handled similar issues.
In 1988, the City adopted Ordinance No. 6296, which amended Chapter 2.250 of the Pasadena Municipal Code. This ordinance was designed to extend indemnity protection to members of the Fire and Police Retirement Board, shielding them from liability for decisions to restrict or eliminate investments in business firms with operations in South Africa.
The Retirement Board requested this legal protection in November 1988 after they instructed legal counsel to investigate indemnification in connection with South African divestment. The Board’s special counsel noted at the time that California Government Code Section 16649 provided such protection to state trust fund board members, and argued it was “equitable and sound policy” to extend the same protection to Pasadena’s local board.
Following these measures, the FPRS portfolio significantly reduced its exposure to the region. While the portfolio held a market value of approximately $6.2 million in South Africa-related investments on January 1, 1987, this exposure was reduced to $1.6 million by February 1990. The City eventually repealed its South Africa Purchasing Policy Ordinance in 1993 after Nelson Mandela requested the lifting of economic sanctions as apartheid was dismantled.
Current Considerations
The Department of Finance notes that while the City’s current investment policy includes a section on ESG regarding “Environmental, Social, and Governance” factors, it is intended as a guideline rather than a mandate or prohibition. The staff report stresses that under the California Government Code, the primary objectives of the investment policy remain safety, liquidity, and yield, in that order.
In response to the proposed resolution’s focus on Boeing, Chevron, and Caterpillar, the Agenda Report confirms that the City currently holds assets linked to these companies. As of April 9, the FPRS held shares in the Vanguard Institutional Index (VINIX) where the portion valued for Chevron, Caterpillar, and Boeing was $123,740. Additionally, the FPRS held a Boeing bond with a book value of $5,276 as of May 31.
The Committee is tasked with providing direction on whether to modify the City’s investment policy or to request that the Fire and Police Retirement System consider modifications to its own independent policy. The proposed resolution suggests that if a company appears in the American Friends Service Committee publication “Divesting for Palestinian Rights,” it should be considered involved in genocide for the purposes of investment restrictions.
The meeting is set for 5:30 p.m. in Council Chambers at City Hall, 100 N. Garfield Avenue in the Pasadena Civic Center.
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