PITTSBURGH, PA (September 17, 2020) After thorough study, the City of Pittsburgh Comprehensive Municipal Pension Trust Fund has adopted new “Socially Responsible Investing” guidelines to screen for pension investments in companies that follow environmentally friendly and socially responsible business procedures.
Last summer, Mayor William Peduto asked the CMPTF to divest the City’s pension funds from fossil fuel industries and in February the pension board named a subcommittee to study the matter. At its meeting this month the board unanimously adopted the new investment polices, which in the investment industry are called ESGs (Environmental, Social and Governance) guidelines.
In July Pittsburgh and 16 other cities cosponsored a policy adopted by the U.S. Conference of Mayors urging cities across the globe to explore divesting from fossil fuels and invest in climate solutions to support a green recovery and a just transition. Divestiture is also supported by C40 and Climate Mayors, of which Mayor Peduto is a member. The Mayor will be speaking on a Climate Week online panel on sustainable investing this Tuesday with the mayors of New York City, London and New Orleans.
“When we began our work to develop Pittsburgh's third climate action plan, we realized that responsible investing by our pension fund is one of the most critical tools not only in advancing a just and clean energy transition, but a move that is simply a good economic investment strategy too," Mayor Peduto said.
The pension board amended its investment policy statement September 3 to include language on its new Socially Responsible Investing Program Guidelines that goes beyond the divestment goals in the City’s Climate Action Plan. The amendment incorporates policies on Protection of the Environment, Reducing Arms Production and Promotion of Human Dignity, and adopts a screening tool to invest in socially responsible assets and companies that align with the CMPTF’s existing financial performance investment criteria.
“The CMPTF believes that socially responsible investing should be factored into the makeup of the fund’s portfolio,” said CMPTF Board Chairman Ralph Sicuro. “Moving forward we will work to make sure City funds are not invested in entities that could have a negative effect on society and our environment while also maintaining a portfolio that generates strong returns. I would like to thank our ESG subcommittee for their work to create an investment policy that aligns with the values of board trustees and plan participants.”
The full wording of the Socially Responsible Investing Program Guidelines is as follows:
“In addition to CMPTF requesting all equity separate account managers screen out particular investment holdings which have been mentioned above, CMPTF has set aside a portion of the portfolio dedicated for a socially responsible investment allocation with a focus on aligning the underlying investment holdings with the values and beliefs of the trustees and participants of the plan. These dedicated investment mandates will incorporate socially responsible investment factors through a positive screening investment approach. Positive screening selects companies based on specific investment factors including environmentally friendly products and practices as well as socially responsible businesses procedures. By investing in companies who practice responsible initiatives in this transparent manner, investors are encouraging behaviors that align with their underlying values and beliefs. Positive screens will include:
Protection of the Environment:
- Consider companies that engage in development and implementation of environmentally friendly products and services.
- Consider companies that preserve the planet’s ecological heritage and creating environmentally sensitive and innovative technologies
- Consider companies that undertake energy conservation initiatives and develop alternative renewable and clean energy resources
Reduce Arms Production
- Support shareholder actions to limit weapon productions, limit foreign sales of weapons and convert corporate capacity and energy to non-military uses and initiatives
Promotion of Human Dignity
- Use shareholder resolutions and other means to encourage companies to provide sufficient wages, working conditions and other social benefits that enable their employees and families to a balanced working life.
- Encourage efforts by companies to promote a respect for fundamental human rights throughout the countries in which they operate and sale products or services
- Favor companies that actively promote corporate policies on equal pay and promotion opportunities for women and minorities
- Encourage efforts by companies to promote the active participation of women and minorities in the representation and management of the company, particularly in creation of company policies and decision-making as well as inclusion in executive and corporate leadership
- Favor companies who strive to make a positive impact on housing, health care and other necessary services that improve the quality of life for the under-served population
- Favor companies that engage in practices or policies intended to end human trafficking
- Favor companies who exhibit the ability to hire and advance the careers of women and minorities
In addition to the above listed positive screens, managers may add additional positive initiatives as long as it is for the benefit of society and aligns with CMPTF’s risk adjusted return objectives.
Lastly, additional socially responsible investment policies may be added if ever there is a conflict with the Client’s values and current investment holdings.”
