Companies in the sector over the next year, rerun the analysis next year and present more analysis and set of recommendations. I will pause and pass it over to luke now to discuss similar analysis we have done in the Utilities Sector and what we have done here is conducted a similar analysis to identify companies to engage within the Utilities Sector over the next year. This is a separate memo attached to the same item. The way the pages are numbered it is broken up. We tend to say boards recommendation. On which page is the item. I see several items. We can make up the motion but i want to make sure we are on the same starting point. Page 36 has the summary of recommended actions. This is three parts. It references tables on the other pages that contain the list of companies. This is the company name. Okay. It is all the same starting point. We dont have to adopt 36. Lets work off that point. Board questions . Just a comment that on the cover page there is three recommended motions. Page 36 also has three. We can do it one by one. We could also reference the table, right . Reference to table 10, table 13. It needs to be clear. We still need luke to present the analysis on the utility companies. We are not finished yet. It is very complicated. A lot of work went into this. Board members want to start with questions before the motion is made . A motion is always in order. You want to go to the next piece of the puzzle, utilities . Go ahead. There is no voting item, but it is an update on the planned activity for the sector. Good afternoon, commissione commissioners. I will present the findings of the report. This represents the early stages of the investigation into the Utilities Sector. This work is relevant for understanding the portfolio vulnerabilities and use full for voting in any investment decision. On electricity generation. This is being a more immediately impacted part of the sector. For the reasons outlined in the report. We do not not have a physical risk in this report. Two points. The transition is accelerating and the bulk of the electric grid is likely to happen within the next five years in developed countries. The electric grid is likely to be a priority of policy members. It is easy for economic and technology. It is 235 million out of the total exposure of 378 million. The public portfolio is well placed in the index can lower carbon intensity. The holdings are placing challenges. Considering the approximately 300 companies to cover globally, we developed the framework that is similar to the oil and gas framework last year. It is the current position of the companies as well as management plans for the position in the companies. The contribution of coil, oil and gas to the generation. The carbon intensities are relative to revenue. The management quality in financial leverage. The results shows at least half of those are companies by portfolio do not meet all of thresholdses which are reasonably lenient and they have vulnerabilities to the climate transition. The vulnerabilities rather than risk within this sector is Climate Change and policy response. I very much is the consideration rather than specifically for the sector. We have monitoring and reporting which we can repeat. We have strict engagement. We will be participating in four collaborative engagements. We have a better understanding that will inform our proxy voting and more for engaging managers with Material Holdings in the sector. I will take questions on this or on the report. Thank you. Thank you for that briefing on the plan you hope to follow in the utility area. It is a plan. Thank you. Lets go back to basically the main recommendation. There is no motion on the floor yet. May i suggest a motion. I suggest the process for voting on this. They have three and i would say from the cover sheet, for example, motion one, if it is moved and seconded, it is identified by the table of memorandum a. I would like to put the pages to each one so that somebody looks this up later then they can reference the pages. I would include the pages on each one of these. If that is an editing thing, that can be done, right . Any more questions . I have one Technical Company about renewables. Exons name comes up all of the time. They are big company in energy. Do you distinguish between company in this area who may be investing to try to develop renewables as well as still working in the fossil fuels, oil, gas . Do you look for that or see that . There is not a direct metric in our framework that focuses on Renewables Investments or revenue from renewables activity, but in theory if companies effectively transition their Business Model in a material way away from hydrocarbons to renewable sources of anything, their risk in the metrics we do measure would improve. It would indirectly show up in our metrics. Staff has found renewable dedicated funds. That is good. The Major Players there is a large amount of market to invest in. Some people are using the distribution to capture the renewables. That is part of this whole thing which we will discuss for the next many years. No motions on the floor. In terms of the way staff has written the recommendation it can be one motion for three or for each or combination or independent board motion a member would like to make. I will make a motion to adopt the three staff recommendations along with the edits i suggested earlier. Second. Okay. Got it. Any more questions . We will call for Public Comment. Mr. Coker, on one end you came to be an environmentalist. On the other hand you are the biggest pusher of hedge funds. Please tell your hedge funds managers not to invest in fossil fuels, firearms or tobacco. Thank you. Thank you, president driscoll and commissioners. We started coming here april 2013 following the board of supervisor resolution and stopped when you hired the esg director to let you guys do work for a while and we are checking back in. We are happy with the quality of the work in general. That doesnt change the take home message. We note the fossil fuel investments are down to 242 million. We think this is the result of either managers kind of getting out of the status quo thinking and looking at actual numbers and or just the fact as mr. Pace stated the Energy Sector has gone down 30 over the last five years while s p is up 50 . It might be attrition that your investments have halved since we started talking about that. September 17th u c announced it would divest the endowment by the end of the month. That is two weeks. That has now been completed. So far as those things are officially reported. Really to everyone from the outside accident many of whom are not in the meeting, some of you have have seen their faces plenty of times, it illustrates a real farce how in 2014 the idea that a five year divestment period was too far discussed. We are now in 2019. We had uc divest a larger amount of money by the end of the mom i think as much as we appreciate the systematic approach, i guess the Climate Emergency belies the pace that we are seeing here and as we have seen from tobacco, there was concern that about tracking error and loss of funds. I will close by saying your staff report shows that the investment restrictions you made in coal and fossil fuels had aa negligent impact and gained a tiny amount of money. Thank you. If there are no further questions. I am sorry. Thank you, commissioner driscoll. I think i understood. I read in the report that within the fixed income sector of this first portfolio, we are be low average in th the amount of mony we he are invested in fossil fuels compared to other organizations in the united states. At the same time we are doing better than average with the public equities. The private markets and hedge funds are a mystery. My general comment is i want to help you all celebrate the progress that we have made with the public equities, but whether it is public equity or fixed income, there has been on behalf of you and me and behalf of all of us, i think we have all been doing too little too late to help change did amount of pollution in the atmosphere. In the report that andrew wrote, he said at current rates due to the amount of emissions there is going to be catastrophic impacts. Hhe didnt spell out what those are. Friends of my wife a ago were living in the town of paradise. November 8th this year they were run out of their house while this thing was burning down. As they tried to get out of town they watched people burn to death. These are not just numbers and words on a piece of paper. It is real misery, real pain. I know there is a lot of money involved and it is a lot of deliberations to make and headaches you have to figure out about the details and i appreciate your work with that and getting the pension check every month. I also appreciate that this catastrophe that is coming according to the report is going to be so much worse than what most people realize. If you can help with that, i really appreciate it. Thank you. I wanted to hear your response. It would be interesting to get on the record. The u. S. System moved quickly is that true for your knowledge. What do you think the challenges are in terms of what we are faced with . We outlined on page 13 other peers responses to thinking about climate risk and considering fossil fuel divestment. Based on our understanding in september last month, uc will divest 13 billion endowment portfolio from fossil fuels. This was a joint statement. It signaled an intention that the 70 billion pension plan quote will soon follow. It didnt outline a timeline or specific material. That is the most current information that i have. Just on your report on page 14, it looks like the new york city pension fund, which is 200 billion in assets has a three year plan to divest completely, is that correct . It was a stated goal of the new york city mayor to divest the new york city pension. They are currently in an r. F. P. Process for three of the five funds to determine the Feasibility Study if and how they could divest. So like our own cal serve has a plan but no actual date they are moving in that direction. To be clear there are five pensions plans in new york. Each has a board. I was calking about c talking about cal. They were talking about three out of the five. I was talking about our own system. The state funds certainly have taken many steps to analyze and mitigate climate risk and invested in low carbon and renewable opportunities. There is no stated plans to consider divestment or evaluate divestment that i am currently aware of. We will call the question on item 12. All in favor of the motion to adopt all three items on page 1 and 30 with the appropriate edits police say aye. Opposed. Standby. So through the chair i would like to make a motion on item number nine to have it voted on again to reconsider. I second. He is allowed to make the motion but it still needs a second. I second it. No discussion. I just want to vote. Vote to reconsider it. Then we can call it. Does everyone understand to bring back number nine on the table . At a future Board Meeting . I think motions to reconsider are not debatable. Commissioner stansbury can participate. It was a 51 vote with commissioner chu voting against and the rest of the Commission Voting in favor of it. It is parliamentary issue. He can vote on the new motion. If there is a new motion. Motion to reconsider item number 9. All iall in favor say aye. Aye. I thought this was a motion to reconsider. That was already passed. We are reopening item 9 for discussion and a new motion or the same motion with a new vote. I would make the same motion to adopt staffs report and then it is going to a new vote on i make the motion. Second . Can i ask what is going on . I just walked in the room. I am sorry. Can you explain what is happening. Is there a second . I will make a second. Is a vote to adopt staff recommendation including two parts on sudan. One part to bring back to the board a consideration to reverse the policy every stricting investments should there be additional changes in the government we heard or goodwill we heard about changing changing in sudan. Second included keeping the dye vestments as is without adding to it. If we continue to follow our policy we so have added seven Additional Companies to the restricted list. The staff recommendation is twoparts. One bring back consideration for removal of policy if there is initial information from the ground about what is happening there. Then the second part is to keep the current restricted list as is and not additional seven we otherwise would with our existing policy. I voted to oppose the recommendation not for the first part to bring back the information but really because our policy hasnt changed yet. For us to suspend it isnt something i was comfortable so i opposed it for that reason. I have a question on the policy with the companies. Those companies are on a list or is there a vetting of everyone company. In the past we vetted all companies. They didnt all wind up on the list. We contacted and had correspondence with both of those companies, confirmed they do conduct business in sudan, which fits within the criteria that we restrict investment for Business Operations in the country. Next would be to confirm with Investment Managers they are sable to confirm that without any issues with portfolios. We have no Additional Research with those companies. The company by company was researched. We didnt divest of all of them. It is how broadly that is written. Once data are screened through msci indicates a company has restricted Business Activity, we take proactive steps to reach out to confirm whether or not the information we have is accurate before we recommend them to be added to the list. We have gone through those steps with these companies in question. You confused me. You have information to put them on the list or you dont . We have information for those companies that they meet the criteria to be placed on the list. We are recommending not expanding the list this year by adding those companies. I can see the contradictory position that confused some of us. To the chair that is why i asked for reconsideration. If it is our policy to not do business with those companies that would likely meet our criteria for divestment i dont understand staffs recommendation to proceed with not adding those companies to the list until we have changed our policy. Likely . That is what it says. Companies that likely. They contacted the companies to better understand the Business Activities. Like you said. I dont know if they have done an analysis to determine if all seven would meet the list or not. Maybe there is a better way forward on the second part of the recommendation. Part of the report was we somewhere confirmed the two companies we own are not supporting the genocide but they are supporting life in sudan. They are electric company. That is the basis of not expanding the list if everything rolls out the way everyone anticipates that it could there would be reason to bring it back to say we should no longer have this restriction period. We are not there yet. It is an interim measure saying we dont want to expand the list, we will come back to you if we want to remove the restriction. Correct. Our investment restriction for a Business Activity in sudan is very narrow or restrictive in scope. Other plans have loser criteria with which they allow companies to do business in sudan. We have a set of criteria that is very restrictive. Those companies do meet that criteria for divestment. As compared to other plans, many plans restrictions are spreads indicated on the fact the u. S. Government has sanctions on the government of sudan. Those sanctions have largely been lifted by the u. S. Government. We are be beginning to see a few plans remove the investment restriction for sudan. It is evolving with our criteria with what others are doing as they monitor it. Again, the state law that requires cal pers to divest according to the government code has been repealed by its own provisions. The provisions state it is repealed once the factions are lifted. They have yet to take action to remove the restrictions. However, it is certainly an evolving situation with several parts in term of the actual on the ground situation with the government in sudan as well as the criteria with which we identify companies with restricted Business Activities. You have a question . Yes. Why did you only analyze two of the seven . Did you analyze more . We directly had contact with those two companies. The other companies we asked for clarification of their Business Activities we did not get a response from. It included the response from snider here. The rest of the companies did not respond to us. Wouldnt it make more sense if you have the recommendation be restricted to those two and the other five to maybe potentially have them added to the list rather than proceeding with not adding anyone to the list . Iif that is the boards pleasure, certainly be we would proceed with you want these companies. We made the best recommendation based on what we have determined to be the current status of the change in government. You know, we believe that our recommendation made sense. We understand there is a disconnect and potentially us going against our policy by not adding these companies. It really is a recommendation that we not add anything to the list until we find out whether the new government is going to resolve the issue of needing the restriction. I would like allen to give us guidance. Do you have any thoughts . They have abandoned the restrictions on the grounds andrew suggests. The situation has improved. The u. S. Government dropped sanctions. Arizona was statute and it is being changed. The situation in the sudan has moved aware from the circumstances that caused the restrictions to be adopted in the first place. I would urge you to not additional to the list. You probably should eliminate did list. Andrew is wise to say you should be assured the situation is better and not accept the lack of sanctions as an indication. Others have taken that that the situation that warranted the restriction in the first place no longer existed. Why do you feel this cautious approach is better and what gives you comfort in the manner you are suggesting it . It benefits from a conservative approach to see if stability lasts in the country. There are situations throughout the