Questions on anything we discussed. Any questions . I have a comment. Very impressive. As you know when i was appointed, i was asked a lot of questions about esg by the board of supervisors and the like. I did what i thought was great Due Diligence but i had talked to bill earlier about this, and i wish i had known it wasnt as gloomy as i thought. They have taken an active step forward and andrea is coming on board with your associate. More importantly, the numbers against the benchmarking. I never get the acronyms right. They are proving out it is going in the right direction in terms of our exposure. I commend you on that and hopefully we can bring the light of day on these numbers to the public. Have you shared this with anybody assigned from the Board Members . Folks at city hall who raised these questions in the past . I met with certain beneficiaries, plan members, sort of informally, but no formal presentation to city hall. We have not provided an update since the last time we had conversations with folks apartment city hall. We had discussions with the mayors environment liasson. He traveled to a couple conferences. He sat where the people around the table commended San Francisco for the steps and how they are leading the way in many aspects. Whether the message is getting to to Mayors Office i am not sure. We believe we were contacted by mr. Jeu and he represented the Mayors Office of environment. He invited andrew as a guest of the mayor to attends a conference that otherwise we would not have been invited to. The Mayors Office is aware. Whether they had this comprehensive report, i do you want it. The materials are through early liasson on the environment. I suggest an update for other members of the board who are working on this issue. They will have seen it as radio silence from the time they brought in up. It might be good to show what is done before it becomes another issue. I have given a very informal update on these numbers to the Mayors Office that i was asked about. It is very informal. My concern is the board. I dont think they have been brought along. I echo that and maybe shipping the reports to them. The update part of it, you are right. It comes up generally in a budget committee. We would like to prevent it not coming up in the budget committee. Thank you, andrew, for the update. I have been following this closely and attended a lot of meetings with you. I would say the progress we made has been remarkable. Thank you very much to you and your team. I concur with the comments made by commissioner chu that is where the feedback will come from. Have you received mid feedback with the piece with exon and others. I know that was a big issue with the fortune 500 companies. Exon was a big standout. Familiar Institutional Investors voted the way we voted on this issue. Is there any follow up . There has been. I think the company is now making an effort to engage with investors, but no specific update in terms of an outcome to report. The other issue i know is big at cii was the executive and board representation. I am glad you joined in that the way we voted on those. For Institutional Investors this is a major issue moving forward as you know from c i i. I really appreciate the fact we joined with othertutional investors. I am looking forward to more. I knew about the pri. I am glad we are on that as well. I would like to hear more on the other piece. We will update that item when we talk about our firearms report. Perfect. Thank you. On your page 6, it goes to the middle platform. The esg investment management. Not the one on the screen right now. It will go esg investment management. On the screen before that there is a bullet integrating it to investment process across asset classes. I know we see your memos attached in investment recommendation. Those are Investment Decisions to make you through on the positive side. The question says for this work there has to be in the process like risk management. It is esg screen which is very broad. Has it resulting in stopping staff from pursuing any represent relationship or recommendations. It is certainly something we can document more comprehensivelyinmoremormore cod social considerations that we integrate and have stopped investments to make a recommendation or come to my desk. We havent done a comprehensive process to catalog that. There is so much to keep track of. The table with the performance numbers, plus and , when it is a summary it hides other work. That is why i asked. If it helps staff screen out other compliant managers, it is another way to prove those urging us to do that why the system is producing. You dont see it in the numbers. No further questions i will call for Public Comment. You Board Members that want to go to the front door to invest in firearms or tobacco or fossil fuels, you dont seem to have a problem in the backdoor in investing in hedge funds. Hedge funds will invest in anything it can make a quick profit in, even if that is investing in fossil fuels, firearms and tobacco so if you want to leaveiate that problem, all you have to do is divest from the hedge funds starting today. Thank you. Thank you very much. Commissioner driscoll and retirement board it is a long time. I am jed the regional climb see Organization Climate organization. In 2013 we started coming to your meeting. The City Residents concerned about Climate Change. I can see why your esg work is around the country. Iowa business to thank your staff from everyone who bangs their head against the wall from 2013 to 2018. This is lightyears away from where we were. The commissioner funded the idea things were courtroomy came from what you would see a staff report in the terms of quality of discourse. This is truly, seriously, a completely different body almost. The only problem is that this strategy is uniquely poorly suited for fossil fuel industry because the core business is the problem so the esg strategy and framework for esg issues more producely, i think this is the most comprehensive and amazing plan i have seen. I guess the concern here is that engagement with fossil fuel companies as we have argued for many, many years and presented reams of paper on is fairly fruitless and measured in how Many Companies replied or responded. Not in terms of what we are doing together with them. I dont see anything about active Shareholder Resolution ifs. This is something they committed to in 2015 or 2016. There is a lot to do but probably should move to level three. Thank you. Any more Public Comment . This is a discussion item only. Sorry i didnt see you. I am david page. Some of you remember me from meetings past. I started collecting my pension about five years ago and i have been to meetings here trying to advocate for esg, more esg investments. Like jed was just saying, we moved the needle in a positive direction. Since we are speaking about the esg update, i would like to comment about the s part of the esg. We have a fantastic, thoughtful report put outlined b o put outy andrew. What i would like to recommend is you do something similar. It is so easy to whip out in five minutes. I would like to see something done for the s part. Some of the characters that we are currently invested with are friends o of Valdimar Putin and those who dont share a commit commitment to human rights. There is not a lot of homework of the worst of the worst. Who are we invested in bringing us is most return on investment even though they might be engaged in torture or murter. I dont believe you can take action until you get the information. Thank you very much. I appreciate it. This is discussion only. We will continue to item 8. Action item. Annual report and recommendation on investment restriction in u. S. Tobacco companies. This is an update on level three of our esg policy. It includes a recommendation. Thank you. A quick update on the us tobacco restriction. We have had this in place since 1998, the year that u. S. Tobacco manufacturers entered the master Settlement Agreement with nearly every state attorney general. We currently are uses the recertain and data sources to determine what companies are on the restricted list. We reevaluate each year to determine if companies should cot on or off the list. This year we recommend two new companies to the restricted list, neither of which we correctly have holdings in. We also recommend a few updates to the list to reflect name changes that Certain Companies have made over the last year. We are also recommending the removal of two companies from the list. One due to the fact it is delisted. The other because it was a tobacco distributor and the distribution revenue from tobacco has fallen below the 10 threshold. It does not manufacture tobacco products. Page 2 and 3 provide updates of the market for the last year. Smoking rates continue to decline. As you are aware Electronic Cigarette usage has caused concerns for a lot of people. I can answer any questions on that. We are now monitoring the impact of risk and return for each of our investment restrictions. It will include those in each separate report in addition to the aggregate report. As a refresher we have seen since 1998 an overall negative 99 million impact what we estimate for that time period. Appendix a contains the restricted list with the suggested changes noted through the use of red font and strike through. An independent fee would be the new list that reflects what the list would be if the board votes to approve it. Board questions . I make a motion to adopt staff recommendation. Second. One question. In appendix b i dont keep track of which company has which product. This issue about jewel, are they listed in here . Yes, the group owns a 35 stake in jewel. It was motion made and seconded. I have a question. Clarification in terms of impact you are tracking for the items that we are using. Would the 88 million, the way i understand it the impact to the Retirement Fund is 88 million less than if we had been investing in those tobacco industries. What is the basis of measure you held certain securities arpositions and we use that as a basesis to determine the 88 million. Help me understand that quickly. It is all based on a set of assumptions. That is what we used to hold and divested from . Basically if we started in 1998 and invested our entire public equity port foam leo in the index tracking strategy for the policy benchmark. Versus if we invested in the same strategy without the securities on the restricted listing. The company rebalanced any proceeds or losses from these investments. It is assumption, the best we could make to conduct this analysis. When we invest with different managers, they invest some actively, some passively, we dont know if they would have known or not owned these companies. This is a worth case scenario. 90 million impacts due to compounding over 20 years of those losses. Thank you. That is only one large piece of the portfolio. Public comment . I will call for the motion. All those in fair. A. Opposed. Nine action item. And report and recommendation on investment restriction in Companies Operating in sudan. Board members this is a update on our level three of our esp policy related to targeted investment in sudan and includes a recommendation. Our investment restriction is in place since 2006. That was sort of the height of the save our four movement well into the genocide that was occurring in the region. The situation has certainly evolved and changed exception then. I will walk through the key points right now. They are relevant over the last two years. In 2017, out going president obama basically issued an executive order to lift most comprehentive against sudan. That was reaffirmed by. Trump. By and large the sanctions on sudan have been lifted. There are certain sanctions in place, particularly those that relate to visibilities relating to sanctions. The u. S. State Department Still considers sudan to be a state sponsor of terrorism. We havent said the entire government is acting in accordance with the u. S. Wishes. These are important evolution over the last two years and certainly the situation on the ground there is currency a transitiontal government. There was a military crew this. An over though of the military. There is now a joint civilian Transitional Government in place. The goal is to transition to a democratically give ilian government over the next two years. There are flairians of violence against demsock see demonstrators. The underground statement. What we recommend here sort of in recognition of the progress, we propose not to add Additional Companies to our restricted list in 2019 but to maintain our current restricted list as it is in place with the objective of monitoring if ongoing situation in sudan. If the transition of power goes as we hope, the idea would be to recommend remove moolvie by the 2021 target when this would be fully complete. This differs from 2006 when we first put this in place. It is unclear to staff and i contacted the state department to inquire what the process would be where the u. S. Government with make an official determines that genocide is halted. In the absence of understanding what that process would look like, we are recommending basically the process i described of monitoring the situation on the ground, certainly if there is a flareup of violence, the military refuses to cease tire, if u. S. Reenters sanctions we would not change the recommendation about the investment restriction. If all goes as planned and we are comfortable that would be the trigger staff would use to recommend to the board to revoke or remove the investment restrictions. The government may change the policy and operations. But the operation of the Companies May not change. Is that possible . Meaning they would continue to do business in sudan . Yes doing business the way they were doing. Correct. It had to do with companies specific, not just about how oppressive the government could be. The government was selling out assets. Our investment restriction did we late to these companies doing business with the government of sudan or providing or doing miner aleer mineral ecktransaction or provides weapons to the government of sudan. To remove that restriction would imply if we are comfortable that the government in place is democratically elected and not enacting genocide on its citizens we are comfortable that companies can do business with that government. Be prepared it may be listed company by company if the company is still a bad character. Sure. That is how i understand the two pieces of puzzle. Go ahead. Your last statement was if the government is no longer committing genocide on its people. How are you measuring the behavior of the government to make this decision . Based on your recommendation. I think the two key areas to look to are our government posture towards the government of sudan, the u. S. Possdoor as well as other un members. We can look to organizations. That would be part of your recommendation . It is important to understand both how governments are treating the government of sudan as well as parties that are maybe on the ground and have a different view of what is happening. We have looked at both of those resources. They do have differing views how far the situation has been proved. You will provide as part of your recommendation edges we have. There are other issues since the initial genocide issues. There is a lot of other governments are critical of sudan for participating in modern day slavery. There is more issues that have come through generally. The more we invest the more we increase the institutions it provides for less of that. I would like to see a report making our final recommendation based this is on our no business list for a considerable amount of time, and it is in an area of the world under a lot more scrutiny. We need to look at the overall recommendations on the number of companies doing business and what those businesses would be. Trying to interact with the sudan ease government. Public comment . Commissioner. The recommendation on the memo is twoparts. One to at some point bring back to the board an analysis of the activities in sudan and whether or not we want to change our position or policy. That is something that is just a reevaluation in the future. The second part of the recommendation is not add on seven companies under the restriction. If we were to continue on with our policy we would add seven companies to the restrictive list. Part of the recommendation is to not add those seven on for the coming year. Walk me through why we would suspend the policy when we havent decided to stop the policy yet . This is in recognition that the situation has largely 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