Stop pretending Israel divestment is ‘sustainable investing

The Methodists claim their list of countries was based on Freedom House’s annual ranking of countries from “free” to “not free,” according to political rights and civil liberties.

By JULIE HAMMERMAN
January 16, 2016 22:19
3 minute read.
Boycott Israel sign

Boycott Israel sign. (photo credit: REUTERS)

 
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Is discrimination worse when it’s overt or when it’s surreptitious? The United Methodist Church decided to take the surreptitious approach. They could have simply announced that their $20 billion pension fund will divest from Israel in support of the BDS (Boycott-Divest- Sanction) movement, which seeks the destruction of the Jewish state. But that would have rightly been viewed as discriminatory and perhaps anti-Semitic.

So instead they hide behind the “sustainable investing” approach, where investors seek social and environmental impact in addition to financial returns. The field has grown dramatically in recent years, both in assets under management, and influence in the business world. Unfortunately, this positive arena has been manipulated by the BDS movement over the past decade.

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In announcing a new divestment strategy recently, the United Methodist Church weakly clings to an investing process that “highlights human rights-related risks that could potentially affect the value of investment assets.” As a result, they have divested from 39 companies operating in 14 countries: Central African Republic, Eritrea, Equatorial Guinea, Israel-Palestine, Morocco-Western Sahara, North Korea, Saudi Arabia, Somalia, Sudan, South Sudan, Syria, Turkey-Northern Cyprus, Turkmenistan, and Uzbekistan.

The Methodists claim their list of countries was based on Freedom House’s annual ranking of countries from “free” to “not free,” according to political rights and civil liberties.

Freedom House categorizes 51 countries as ‘not free,’ while the Methodists selectively chose only 14 countries for divestment. Of the 14 countries slated for divestment, all of them are rated ‘not free’ by Freedom House, except for Israel. The Methodist divestment list omits both China and Russia, despite the fact that both countries receive the poorest rating by Freedom House, and both are involved in territorial disputes.

Israel is on the Methodist list for divestment, even though the country received the highest “free” rating from Freedom House, and the only “free” rating in the Middle East. The West Bank and Gaza Strip receive a “not free” rating, with most of the blame in Freedom House’s analysis placed on the Palestinian Authority and Hamas. Nevertheless, on the list of specific companies selected for divestment, seven are Israeli and none are Palestinian.

So why is Israel included on the Methodist divestment list when many countries with far worse human rights ratings by Freedom House are excluded? And why is the list so arbitrary, intentionally avoiding countries like China and Russia? Because the Methodists are using a flawed sustainable investing process to disguise their support for a discriminatory campaign against Israel. The anti-Israel BDS movement has pressured the Methodist Church for years, and sadly they finally prevailed. In addition to betraying their own moral compass, the United Methodist Church has betrayed the sustainable investing field as well.



The Methodists claim that “avoiding such investments supports our commitment to sustainable investing, which we believe ultimately improves the performance of our investment funds.” While sustainable investing has been shown to produce strong financial returns in a number of studies, the Methodists’ politically motivated divestment has nothing to do with sustainable investing, and may damage their pension’s financial performance.

Sustainable investors that truly care about human rights seek investments with positive impact that enable social progress and peace. If the Methodists really cared about promoting peaceful coexistence, they would instead support economic cooperation and invest in Israeli-Palestinian joint ventures.

Rather than investing in peace, collaboration, and economic stability, the Methodists have selected an ugly path. The Israel divestment campaign is prejudiced and targets Israel alone in a two-sided dispute. Both Israelis and Palestinians play a role in the prolonged conflict, yet the Methodist Church decided to punish one party to the conflict while giving the other side a free pass. Over the past 10 years the BDS campaign has done nothing but exacerbate tensions, and create a new avenue for economic warfare instead of new avenues for cooperation.

The Methodists are viewed as leaders in the sustainable investing field. It’s tragic to see them wield power in such a reckless and prejudicial manner.

The writer is executive director of JLens (www.jlensnetwork.org) a network of Jewish values-based investors, and manages the JLens US Equity Investment Strategy.

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