Ordinance committee to recommend changes over concerns about equality, tobacco, guns, fossil fuels and the Dakota Access Pipeline
The Santa Barbara City Council’s three-member ordinance committee has moved forward with recommendations to change the city’s investment policy, with an eye toward socially responsible investing.
The committee agreed to support a policy that supports “socially responsible goals to the extent that such investments achieve substantially equivalent safety, liquidity and yield” compared to “traditional investments.” The investments are encouraged in entities that support equality of rights, regardless of race, sex, religion, age, national or ethnic origin, sexual orientation or disability.
Taking it a step further, the committee said Tuesday, investments should be discouraged if they are in entities that manufacture tobacco products, weapons, military systems, nuclear power, fossil fuels or entities that do business with fossil fuel companies. Investments are discouraged in entities that exhibit corrupt corporate ethics.
The city will use a points system to gauge which companies to invest in.
“I am really happy with the direction everything is going,” Councilman Jason Dominguez said.
The City of Santa Barbara is considering shedding financial involvement with banking institutions that have ties to the Dakota Access Pipeline, an 1,100-mile pipeline that connects the Bakken shale oil fields in North Dakota to storage facilities in Illinois. The pipeline began operating in June.
The new investment policy was fueled by concerns raised by a group of Santa Barbara residents. The city has a $4 million certificate of deposit in Union Bank of California (which is owned by Mitsubishi UFJ Financial Group) and another $250,000 CD in Goldman Sachs. It also has a $2 million corporate investment in Wells Fargo.
All three institutions helped finance construction of the Dakota Access Pipeline, which was opposed by environmental organizations and some Native American groups over risks to drinking water and the protection of sacred burial grounds.
Some U.S. cities have adopted socially responsible investment policies and divested entirely from banks that financed the pipeline.
Santa Barbara’s finance staff is stopping short of recommending an outright ban on investment in certain companies. The Finance Department’s No. 1 obligation is to protect the economic safety of the city, officials say.
The city is also looking to put out a request for proposals for a new bank to manage its funds and investments. The city currently banks with Union Bank of California, formerly Santa Barbara Bank & Trust.
“I am excited to hear that Montecito Bank & Trust is sufficiently capitalized to be eligible to be competing for our business,” Councilman Harwood “Bendy” White said.
Councilman Gregg Hart, who serves as Finance Committee chairman, said he is happy the city is viewing its investments with a closer eye.
“Ultimately, the council is going to make a decision,” he said. “We’ll see how this tool works in practical application.”