The California Public Employees’ Retirement System (CalPERS) is one of the world’s largest pension funds and one of the earliest to divest stocks of firms that did not meet its ESG criteria. For example, in 2001, it dumped tobacco stocks, which then outperformed. Over the long run, CalPERS suffered a $7 billion loss because of this divestment. By 2017 CalPERS was underfunded by 30% (short of $130 billion), and 1.8 million public employees worried about whether there would be enough funds to cover their retirements. Alarmed, Jason Perez, a police sergeant and CalPERS member, argued that “When ESG has nothing to do with maximizing returns and it is just for the sake of being socially conscious, it shouldn’t have a place in our retirement plan.” He campaigned for a board seat on the basis that CalPERS should invest in law-abiding, profit-maximizing firms such as tobacco companies. In 2019, he gained national publicity when he beat an ESG guru and won a CalPERS board seat. At a board meeting, if you were 

(1) Perez, 

(2) one of the other 12 board members who prefer to keep the ESG criteria, 

(3) a strategy consultant brought in by the board, what would you say?