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(Wissam Nassar / Maan Images)

Milestone victory: pension fund giant TIAA-CREF divests $72 million from Caterpillar

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 A Caterpillar bulldozer is used by the Israeli army to destroy Palestinian property in the occupied West Bank city of Hebron, December 2010.

(Najeh Hashlamoun / APA images)

The We Divest Campaign, initiated by Jewish Voice for Peace, reports today a major victory for the boycott, divestment and sanctions (BDS) movement:

Pension fund giant TIAA-CREF has removed Caterpillar, Inc. from its Social Choice Funds portfolio. As of May 1, 2012, financial data posted on TIAA-CREF’s website valued Social Choice Funds shares in Caterpillar at $72,943,861. Today it is zero.

TIAA-CREF’s decision to divest comes only one month after the Quaker Friends Fiduciary Corporation’s decision to divest $900,000 worth of shares in Caterpillar.

The BDS momentum does not stop with today’s announcement. A precedent-setting vote comes up in coming weeks, when church commissioners of the Presbyterian Church (USA) will vote on a motion to divest from Caterpillar.

No doubt, solidarity campaigners are creating a cost for corporations doing business as usual with Israel and profiteering from occupation, colonization and apartheid.

Update:

The US Campaign to End the Israeli Occupation also announced via email today:

We are so excited to announce that as of this week, Caterpillar was removed from the MSCI (Morgan Stanley Capital International) World Socially Responsible Index, a list used by Socially Responsible Investment (SRI) funds to discern acceptable companies for investment. 

The We Divest Campaign full statement follows:

Caterpillar Removed from TIAA-CREF’s Social Choice Funds

Victory for Pro-divestment Advocates

June 21, 2012- Pension fund giant TIAA-CREF has removed Caterpillar, Inc. from its Social Choice Funds portfolio. As of May 1, 2012, financial data posted on TIAA-CREF’s website valued Social Choice Funds shares in Caterpillar at $72,943,861. Today it is zero.

“We applaud this decision,” said Rabbi Alissa Wise, Director of Campaigns at Jewish Voice for Peace and National Coordinator of the We Divest Campaign (www.wedivest.org). “It’s long past time that TIAA-CREF began living up to its motto of ‘Financial Services for the Greater Good’ when it comes to the people of Israel and Palestine.”

Since 2010, We Divest has been urging TIAA-CREF to drop Caterpillar and other companies profiting from and facilitating Israel’s 45-year-old military occupation and colonization of the Palestinian West Bank, East Jerusalem, and Gaza Strip.

“By selling weaponized bulldozers to Israel, Caterpillar is complicit in Israel’s systematic violations of Palestinian human rights,” said Rabbi Wise. “We’re glad to see that the socially responsible investment community appears to be recognizing this and is starting to take appropriate action.”

Caterpillar has come under increasing criticism from human rights organizations in recent years for continuing to supply bulldozers to Israel, which uses them to demolish Palestinian civilian homes and destroy crops and agricultural land in the occupied territories, and to build illegal, Jewish-only settlements on Palestinian land.

In the coming weeks, many will be watching the Presbyterian Church (USA) General Assembly taking place in Pittsburgh, where church commissioners will vote on a motion to divest from Caterpillar and two other companies, Motorola Solutions and Hewlett-Packard, that remain in TIAA-CREF’s Social Choice Funds.

Last month, Friends Fiduciary, a Quaker institution, divested $900,000 worth of shares in Caterpillar stating: “We are uncomfortable defending our position on this stock.”

What Others are  Saying

Omar Barghouti, Palestinian human rights activist and founding member of the BDS movement said, “CAT is out of the bag of TIAA-CREF’s socially responsible companies thanks to the inspiring campaign waged by JVP and its partners, with vision, persistence and tactical skillfulness. Palestinian civil society, represented by the BDS National Committee (BNC), deeply appreciates these efforts and believes that more pressure will ultimately convince TIAA-CREF to fulfill its basic moral obligation to finally divest from CAT and all other corporations that are complicit in Israel’s grave and escalating violations of international law and human rights.”

Cindy and Craig Corrie, Rachel Corrie’s parents said, “For nearly a decade, we have witnessed human rights abuses committed with Caterpillar equipment in the West Bank and Gaza and have joined thousands who have asked the company to stop supporting these actions.  We are hugely gratified that TIAA-CREF has taken this step.  When governments and corporations avoid responsibility, we must refuse to profit from their abuses. Our family salutes and thanks TIAA-CREF for this decision that moves all of us closer to accountability.”

Jennifer Bing, Middle East Program Director of the Chicago office of the American Friends Service Committee, a member organization of the We Divest Campaign Coordinating Committee, said, “As a TIAA-CREF client institution which has divested from Caterpillar ourselves, we are encouraged to see this first, great step toward creating a complete occupation-free portfolio that my colleagues and I are eager to have as an investment option.”

Samia Shafi of Adalah-NY, a member organization of the We Divest Campaign Coordinating Committee, said,  “This small, positive first step shows that TIAA-CREF is not immune to pressure for human rights for Palestinians. Our We Divest Campaign will continue pressuring TIAA-CREF until we win full divestment from all companies in TIAA-CREF’s portfolio that profit from violations of Palestinian human rights.”

Anna Baltzer, National Organizer with the US Campaign to End the Israeli Occupation — a coalition of more than 380 organizations around the country — and a member group of the We Divest Campaign Coordinating Committee, stated: “After years of Caterpillar refusing to change its practices, we are gratified that the U.S. corporation and others like it are seeing that support for Israel’s occupation and apartheid policies comes at a dear cost. There can be no more business as usual with such institutions. The tide is turning.”

Background

  • The Presbyterian Church (USA)’s Mission Responsibility Through Investment Committee (MRTI) attempted unsuccessfully to negotiate with Caterpillar before calling for selective divestment. MRTI’s report on engagement with companies on Israel/Palestine-related issues noted that:

Caterpillar’s complicity in non-peaceful pursuits led the 2010 General Assembly to denounce the company’s profiting from involvement in human rights violations. Sadly, despite significant support for the shareholder resolution calling for a review of its human rights policy, Caterpillar has become even more intransigent. It has cut off all communication with the religious shareholders. Caterpillar continues to accept no responsibility for the end use of their products.

 

Comments

Actually, I’m fairly certain that this was not any political decision on the part of TIAA-CREF. That TIAA-CREF fund uses an index from MSCI to choose what companies it will invest in for that fund. It was MSCI who made the decision to remove Caterpillar from the index. Since the Caterpillar no longer made the index generated by MSCI, TIAA-CREF removed it from its fund. The We Divest campaign is claiming victory when the decision had nothing to do with their campaign.

The following is directly from the TIAA-CREF Social Choice prospectus:

"The Fund primarily invests in companies that are screened by Advisors’
selected vendor(s). Currently, the vendor providing the social screens is MSCI,
Inc. (“MSCI”). The social screens favor companies that meet or exceed certain
environmental, social and governance (“ESG”) criteria. Once a universe of
socially screened companies is established, Advisors then uses quantitative
modeling and other techniques to attempt to closely match, to the extent
practicable, the overall investment characteristics of the benchmark index.
Advisors invests in U.S. companies included in one or more MSCI ESG Indices
that meet or exceed the screening criteria described below but Advisors is not
required to invest in all companies that meet this criteria.