South Pasadena Eyes Moving to Carbon Neutral Investment Portfolio

Garfield Park in South Pasadena (Photo – Emmanuel Kraultez)

Fossil fuel investments are on the chopping block in South Pasadena and the ax could fall in the months ahead as the City Council adopts an ambitious climate action plan.

By William J. Kelly

Questions about poor performance of oil and gas holdings compared to other companies were raised last week by City Councilmember Michael Cacciotti. He observed that while city-held bonds issued by companies like Home Depot were producing yields in excess of 4 percent, holdings of fossil fuel company bonds were yielding just a little over 1 percent.

Cacciotti noted that with President-elect Joe Biden pledging climate change action and United Kingdom Prime Minister Boris Johnson aiming to phase out gasoline-powered cars by 2030 in favor of electric vehicles, the prospects for fossil fuel investments look dim.

South Pasadena City Councilmember Diana Mahmud concurred and called for the city’s Finance Commission to examine “the feasibility of a carbon neutral investment policy.” Mahmud said moving to a carbon-free investment portfolio seemed particularly timely given that South Pasadena is poised to adopt a climate action plan. That plan seeks to cut greenhouse gas emissions by 33,000 tons a year, mostly from cars and buildings. The City Council was scheduled to adopt it at its Nov. 18 meeting, but ran out of time in a meeting that included several other items and wore on into the wee hours. The climate change blueprint is now set to be heard by the City Council on Dec. 16.

Meanwhile, the Finance Commission will take up the question of how to decarbonize the city’s $35.1 million portfolio, which includes $258,362 of Chevron Corp. bonds and an additional $163,070 of Exxon Mobil Corp. bonds. The panel is expected to report back to the City Council in the months ahead with a revised investment plan after a unanimous City Council vote on the matter Nov. 18.

The city’s investment portfolio consists of money designated for specific future purposes, plus money held as a rainy-day fund.