Improved on the ground by many accounts. Not fully resolved in terms of human rights abuses. By and large the country is stable. There is a joint civilian and military government in place. Things seem to be progressing according to the plans that have been outlined by the government. With the seven companies that would be added to this restricted list would it require us to divest of any positions. Are there ones where we would potentially have to take our position and divest . Correct. Those are the only two . This would be on page 2 of the memo. In the third column 2. 36 million in the electric. 3. 94 million in se s iemens tht we could make subject to our investment restriction. The determination was that by and large the u. S. Has lifted sanctions. These companies are providing as commissionter pointed out services to the citizens, and i think there are necessary communication and Power Services that the citizens do need. There is a consideration here of and as we proceed and evaluate the benefits of allowing companies to operate in a Company Versus benefiting a government that is subject to sanctions or is enacting human rights abuses against citizens. That is the balance that we are trying to understand. They havent changed the investment policy as a result of the sanctions being liftedded, is that correct . We have seen two public funds in the u. S. Remove the restriction completely. New mexico education, then colorado Public Employees retirement. Our state funds here still seem to have restriction in place, although it appears that the legal mandate requiring them to do that has been repealed with the lifting of sanctions. That is not my legal opinion, just a reading of the law. I guess my concern is, i think people with funds leave the restrictions in place because they are monitoring the unrest in the country. Maybe the countries operating in the country under that same duress, right . I dont know if it is prudent to monitor it in the same sense . This is why our recommendation is sort of somewhere in the middle ground. We are not removing the restriction. It would apply to the companies we have determined previously fell under it, but pausing the expansion of it while we monitor the ongoing evolution. Before we call for Public Comment we need a motion. We need a motion before you speak. Is there a board motion . This is an action item. I will move to accept the staff recommendation on this. Is there a second . I will second it. The motion is made and seconded i heard a voice. Point of clarification. What is the staff recommendation . Twoparts. Can you reiterate . The recommendation to reaffirm the existing restricted lift that we have put in place since 2006 and has evolved over time. Not add any new companies to that list. Then monitor the progresses of the Transitional Government and come back with a recommendation what we should do Going Forward in a year. You are not barred to wait for another year. If you have useful recommendation to change it. This is what it is today. Thank you. The action item would come back to remove restriction. At any time a special stand alone section, but we are not there yet, but that is just to inform you that is what it would take. It seems like the investment operation has never stopped. We have the motion. The motion is made now speak under Public Comment. I thought you were going to vote for the motion without Public Comment. In addition to sudan, i would like you to put on your wish list to not invest in a country named china, Mainland China, not hong kong or taiwan. The Chinese People in Mainland China are governed by one of the most brutal governments of the world. Look at hong kong and tibet. If you Board Members lived in china, you would all be in the education camps right now. My recommendation is you dont have any direct investments in china. Obviously the investment in the s and p500 practically every company is invested there. You dont have to make any direct investments in china. I would like you to not invest in Mainland China. No further Public Comment i call the question. Those in favor of the motion. A. Opposed. Did you get that. One no. Commissioner chu was a no. That takes us to the next item. And all report and recommendation on investment restriction in firearms and ammunition manufacturers and retailers. This is related to our investments in firearms and ammunition, Manufacturing Companies and retailers. It does include a recommendation. Thank you. Provide an update here on the investment restriction on firearm and ammunition for manufacturers in place since 2016. We use the research and a variety of sources to determine what companies are in the criteria to make them subject to investment restrictions. Based on this review we recommend adding one Company Korean ammunition maker to the restricted list this year. We currently have no direct investment in this company. Also, i want to highlight on this item we have made efforts over the last year to engage with retailers of firearms, companies we have not divested from around the gun retail practices. The companies we have contacted were not as responsive as we hoped. We did get a letter back from Dicks Sporting Goods but did not directly engage with the company. We have seen a willing necessary for certain retailers, namely Dicks Sporting Goods and walmart. Walmart was forced to do that with the shooting in el paso earlier this year. They have taken steps to strengthen practices in response to be and customer concerns about their gun retail accident. They have taken out handguns in their stores completely and are strengthening the background check process. Duckducksduck dicks are dg inventory of certain products, preliminary evaluation says these stores outperformed therapies due to the merchandise they replaced the gun products with. In november last year we did become signatory to the responsible firearms industry along with 13 other investors. This is being staffed that is seeking to engage with manufacturers and retailers as well as the entire distribution chain of civilian firearms and ammunition to encourage them to put in place better and safer practices around the manufacturing andy sign of their products and retail practices. It is in recognition and consistent with Second Amendment rights. It is not seeking to get rid of the industry but engage it to operate in a safer way. We will continue engagement over the next year, and, hopefully, collabberate with other investors. We want to amplify our voice and engagement in this area. Board questions . This is an action item that will require a motion. I make a motion to accept staff recommendation. Motion made by commissioner chu, seconded by commissioner bridges. Public comment. Thank you. I am a resident of san francisco. I read today Dicks Sporting Goods destroyed 5 million worth of guns. That is guns in all stores. The c. E. O. Was quoted as saying people say when i suggest things like that this we arent going to stop mass shootings. I say you may be right. If we save one life, isnt that worth it . I feel like this is an example when sociopaths are not in charge of corporations. I want to highlight the difference between what we are talking about some players in this industry and what we are talking about since 2013 with the fossil fuel industry since 1989, 1991, these companies could have been taking actions out of their own independent human moral drives or just a drive to make money from a resource that will not become scarce error time or unburnable over time by entities that will no longer be able to inhabit the plaplanet. Industry making moves is a possibility. That we have not seen in decades from the fossil fuel industry. We are way, way past the time of engaging in an orderly fashion to see if they will respond to a letter and need to get rid of these investments. Thank you so much. I would like you to have a talk with your Hedge Fund Managers to tell them they cant invest in firearms, tobacco and fossil fuels. I call the question. Those in favor of the motion say aye. Those opposed. That takes us to item 11. Action item annual report and recommendation on investment restriction in her malCoal Companies. Board members this is level three of the esp policy related to dievesment of thermal Coal Companies and it includes a recommendation. Thank you. We have had the investment restriction in place since 2017 for thermal Coal Companies. As we outlined and describe in the memo the industry has a weak outlook, it appears to be in decline. We continue to review our exposure to this sector using msci research and other resources and yearonyear derm based on criteria if we should add companies to the restricted list or remove them. This year we are identifying four new companies to add to our restricted list that derive more than half of their revenue from thermal coal. We currently have no direct investment in any of these companies. In addition, as we propose in october of last year in the climate update we engage with companies that receive less than half of their revenue but more than 10 of revenue from thermal coal. Between 10 to 50 of revenue from thermal coal. To understand their plans and strategic outlook for that segments of their business. Based on that review and our engagement with these companies, we are recommending restricting investment in 13 companies that did not respond to our engagement outreach or have not communicated any plans to exit or strategically review thermal coal business. We hold approximately 100,000 of direct investment in one of the companies and none in the remaining 12 companies. We recommend retaining ownership in three companies that receive between 10 to 50 of revenue from thermal coal because based on our engagement and reserve they do have plans to exit or drastically curtail the thermal coal activities. There are two Additional Companies that we need to obtain more information on before we can make a recommendation for those companies. So the list of all of these is on page 9 of the staff memo. I am happy to answer questions about any of those areas. I am prepared to make a motion to adopt staff recommendation. Second. Motion and second. Board questions . You might alter this list if more information comes in. Are any of these companies you mentioned we had a certain amount of holdings, are they with active Investment Managers or commingled funds . The page four outlines whether those are held in separate accounts or commingled funds. Whether they are held in an actively managed fund or not, we have not outlined here, but i could let you know. Some are in both . Okay. Commingled is awkward. That clarifies that. No further questions. Motion is made and seconded. Public comment. Hello everyone. I promised another retiree that i would mention the Energy Sector has been the worst performer in the past 10 years within the s and p. Coal is part of that. I hope you get rid of all coal three companies and two companies and all of the rest of them. Thank you very much. Thank you. We are very proud of having really struggled to get this process going. We appreciate staffs like the level of analysis and the systematic nay turof nay turf the analysis. On nature of the analysis. I will speak why it doesnt make sense to have these investments. In terms of good faith following the process you are talking about, i want to highlight using percentage revenue as a measure what defines a coal company has afalas see. They get a small amount of revenue from coal but have a huge percentage of the coal. The idea is if i had 51 of the coal but also 71 of the gold and 41 of timber and keel is do coal is doing poorly. I have 51 of the coal. Given the nature of the investment restriction is to do with carbon asset risk, how much coal they have, not how much revenue they are getting from coal, i would propose that actually you come back next month and make an amendment to your level three coal restriction, which uses the actual amounts of coal, basically the top 100 Coal Companies by reservoirs of coal they control and use that as the locust you are trying to pivot as opposed to revenue. A colorado go from a company could go from inside to outside with the assets. That does not change the material nature of the coal business. We are measuring the wrong thing entirely in this particular example. Thank you. I call the question. Those in favor of this motion for the staff recommendation police say aye. Opposed. That takes us to item 12. Action item. Annual update to strategies to address climate risk and recommendation on investment restriction in certain oil and gas companies. Board members. , this is an update on strategies to update climate risk. It is a threepronged recognition and information. This is an update on the effort to manage climate risk. As i am sure you are aware Climate Change is the single Biggest Issue we deal within the ability to Impact Global growth and have major negative implications for nearly every sector of the economy. We are already viewing negative impacts from Climate Change. Folks were faroff track from the necessary emissions caps we need to have in place to really avoid the most catastrophic effects of Climate Change through the end of the century. We believe some of the negative impacts from Climate Change that we as investors will feel are systemic in nature and likely very hard or impossible to fully diversify away from. While there are others we feel are likely to be more industry or Company Specific and there may be an ability to manage that risk. Those are the ones we are trying to focus on in our Climate Strategy approach. The climate update here is in three parts. First, i will provide a quick overview of the overall strategy we adopted october of last year to analyze and manage climate risk in the plan. Next i will discuss the updates to the framework to analyze oil and gas exposures and their Climate Transition risk. Lastly, we will provide an update on a new framework we developed to analyze the climb amount risk for the Utilities Sector. To start we adopted a four part framework to manage climate risk across the plan last october. This is an extension of the strategies to manage climate risk the board approved in the january 2018 meeting. The four pillars that form this are on page three of staff memo include investing capital, opportunities well positioned for the transition to a low Carbon Economy. Think renewable energy, low carbon technology. We make investments across this in the public and private market portfolio. It is a central part of climate Risk Strategy to provide capital for those opportunities that are Growth Opportunities but also are helping with the Energy Transition underway. Two is engage in efforts as we previously discussed. We are engaging with Companies Directly to understand if and how they are aligning the Business Model and strategy with transition to low Carbon Economy to inform or Investment DecisionsGoing Forward. Third, we do have divestment as part of our strategy where we have determined that companies have a high unmitigated risk from Climate Change that cant be addressed through engagement, we will restrict investment in them. As we discussed earlier we divested from the thermal coal sector by and large. I will provide an update in a minute on the target de investment in oil and gas. Fourth is advocacy given the climate risk has the systematic component i mentioned. We are trying to support climate regulation to protect capital cl markets over the longterm working with other investors to engage with policymakers and financial regulators in climate risk into the prudential policy. Fundamental for all of the work is research and analysis that we do to try to understand what makes a company well positioned to a low Carbon Economy versus one that doesnt. In october of last year we introduced this framework we developed to evaluate the risk for oil and gas sector. This involved using seven different metrics in four parts. Working with Carbon Tracker Initiative and influence map to develop key metrics and measures for this analysis. This resulted in the board voting to restrict investment in seven companies to put 24 Additional Companies on a watch year for a multiyear engagement from staff. We rerun this this year as we plan to do each year, and i will provide updates on what the outcome of that analysis is, but stepping back slightly, we also looked overall at the exposure to the oil and gas sector and do want to highlight we are meaningfully less invested in the oil and gas sector on both an absolute and relative basis compared to a year ago as well as five and 10 years ago. As of june 30th we had approximately 242 million or 2. 1 of the Public Market portfolio in this sector compared to 437 million or 3. 3 one year prior. We are meaningful underweight in this sector relative to the public equity policy