Washington — The high dam mounted against the movement to boycott, divest from and sanction Israel has sprung its first significant leak — and for opponents of the BDS movement, as it is known, the timing could not be worse.
In its general assembly, taking place between June 30 and July 7, the largest Presbyterian denomination in the United States will vote on divesting its investment portfolio of companies deemed to be supporting Israel’s policies in the occupied West Bank and Gaza, and in East Jerusalem. It’s the final showdown of a long and drawn-out process in which many Jewish groups have been involved, adamantly combating the proposed portfolio purge.
But on June 25, just as BDS opponents were gearing up for this challenge, MSCI, a financial analysis firm with more than 6,000 clients worldwide, made a startling disclosure in a public statement: Controversy over the use of Caterpillar Inc.’s bulldozers in Israel’s occupied territories had been a “key factor” in MSCI’s March 1 decision to drop the heavy-equipment manufacturer from its index of socially responsible companies.
That MSCI move had at least one immediate practical consequence: In March, TIAA-CREF, the leading retirement assets management firm for workers in the academic, research, medical and cultural fields, quietly dropped Caterpillar from its socially responsible investment portfolios, selling off some $72 million worth of Caterpillar stock from these funds.
“I haven’t heard of other funds or companies that use the issue of Israel as a filter for investment decisions,” said David Kathman, an analyst specializing in socially responsible investments at Morningstar, a leading financial data and analysis firm. Most funds interested in social responsibility focus on good governance and avoiding investments in tobacco and alcohol industries, he noted. It is not clear how many will follow MSCI’s lead in reconsidering companies that, like Caterpillar, sell products seen as supporting Israel’s occupation, he said.
“I’m sure the BDS people will portray this as a victory, and those in the Presbyterian Church who are inclined to agree with them surely will not check to see if the evidence is credible or not,” said Kenneth Stern, a specialist on anti-Semitism and extremism at the American Jewish Committee, one of the groups fighting to counter divestment efforts.
The Presbyterian Church (USA) has been grappling with the issue of divestment for years. But a massive outreach effort by the Jewish community, and a gradual and complicated decision-making process within the denomination, managed to get the issue off the agenda or deferred to committees for further, slow-moving examination.
This year, however, the Presbyterian Church (USA) seems determined to pass a resolution divesting funds, or preventing further investments, in Caterpillar, Motorola and HP. The latter two, like Caterpillar, produce equipment used by the Israel army in the West Bank.
“We have run out of hope that these companies are willing to change their corporate practices,” said Rev. Brian Ellison, chair of the denomination’s Mission Responsibility Through Investment Committee in a February 17 statement. “We have made diligent effort to engage in conversation. We’d like to do more, to make progress, but substantial change does not seem possible.”
If passed, a Presbyterian divestment resolution could cement the otherwise shaky BDS victory in the Caterpillar case and mark a new era for divestment efforts. “Regardless of the outcome, there is a conversation we in the Jewish community have to hold about our relations with this church,” warned a Jewish activist involved in inter-faith relations.