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Divestment impacts and keys to success

Nov 11

Written by:
11/11/2015 11:52  RssIcon

Presentation to the All Party Parliamentary Group on Weapons and the Protection of Civilians

 

Yesterday, Ethical Consumer's Tim Hunt spoke at the The All Party Parliamentary Group on Weapons and the Protection of Civilians roundtable discussion on UK investments in nuclear weapon production.

The event was organised in conjunction with the launch of a new report called Don't Bank on the Bomb due for publication tomorrow. The report will outline the extent to which financial institutions are currently invested in companies which produce nuclear weapons.

The aim of the report is to help build a divestment movement around the issue of nuclear disarmament. 
 

 

 
 

Speaking at the event were:

 
The presentation from Tim was a wider look at successful divestment campaigns past and present.
 
He gave the presentation below in which he covered: 
 
  • Two current divestment campaigns – how they are gaining momentum
  • Similarities between current campaigns
  • The anti-Apartheid campaign – the historical precedent
  • Key lessons
 
Introduction
 
Divestment is now seen as a key campaign tool by activists throughout the world and is becoming a key driver in delivering lasting change. This is largely thanks to the success of the anti-Apartheid campaign in the 1980's.
 
At the current time the two most successful divestment campaigns appear to be the Carbon Divestment Movement which is tackling the climate change issue and the Boycott, Divestment and Sanctions Movement which focuses on the human rights issues in Palestine/Israel.
 
Carbon Divestment movement
 
International coalition under the umbrella of 350.org with national groups taking part e.g. Fossil Free UK , Move Your Money in the UK, unions, student groups etc. The movement now claims that $2.6 trillion has been divested from the fossil fuel industry with 469 INSTITUTIONS DIVESTING.
 
 
  • Faith-based Groups — 29%
  • Foundations — 26%
  • Pension Funds — 13%
  • Governmental Organisations — 12%
  • Colleges, Universities and Schools — 9%
  • NGOs — 7%
  • For-Profit Corporations — 2%
  • Health — 1%
 
 
Gaining Momentum
 
Timelines for 2015
 
October
Uppsala just became the largest city in Sweden so far to commit to divest itself from fossil fuels, after the city council voted to ban investments in coal, oil and gas. (€37-43 million).
 
Earlier in October, Sweden’s capital Stockholm announced that it will review its investments in fossil fuels but failed to specify a time frame for divestment.
 
September
The Californian senate announced a coal divestment bill. The bill requires the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS) — which combined are responsible for $476 billion in assets and 2.4 million retirees — to remove all holdings in companies that get at least half of their revenue from coal mining. 
 
June
The Norwegian Parliament decided that the Norwegian Government Pension Fund is to divest from coal burning and coal producing companies. The decision means that about £7.7 billion GBP ($8.4 billion USD) will be divested from coal companies.
 
The Lutheran World Federation (LWF) announced that it will exclude fossil fuel companies from its investments and calls on its member churches with 72 million members to do likewise.
 
May
The Church of England announced that it will divest its holdings of £12m in thermal coal and tar sands.
 
Syracuse University committed to divest its $1.18bn (£800m) endowment and to seek new investments in clean energy technologies.
 
London School of Hygiene and Tropical Medicine divests from coal. Oxford University rules out investing in coal and tar sands. 
 
April
SOAS, University of London, announced that it will divest from fossil fuels within the next three years. The Guardian’s parent company, Guardian Media Group said it would divest its £800m fund. 
 
March
Oslo announced it will be divesting US$7 million from its pension fund investments in coal. 
 
February
Vermont's Goddard College says it has completed its divestment from fossil fuel company investments, making it the third college in the state to divest after Sterling and Green Mountain College. 
 
January
The University of Bedfordshire has become the second higher education institution in the UK to commit to not investing in the fossil fuel industry (behind Glasgow) 
 
 
Boycott, Divestment, Sanctions
 
In 2005, Palestinian civil society issued a call for “Boycott, Divestment and Sanctions against Israel until it complies with International Law and Universal Principles of Human Rights”.  It was endorsed by more than 150 Palestinian groups and is a non-violent tactic.  
 
 
 

The three-pronged approach operates at multiple levels: from individual consumers to institutional investors to states.  It presents an opportunity for the international community to stand in solidarity with the Palestinian people and demand an end to Israel's occupation of Palestinian lands and military aggression against the Palestinian people.
 
Key divestment targets include:
 
  • Global security services giant G4S which provides services to Israeli prisons in which human rights campaigners have documented systematic torture and ill-treatment of Palestinian prisoners, including child prisoners. 
  • French multinational Veolia which until August 2015 was involved in the Jerusalem light railway, which connects Jerusalem to illegal Israeli settlements.  It also operates a landfill site in the occupied Jordan Valley which takes waste from Israel1 (in violation of international law) and formerly ran settler-only bus routes in the West Bank.

 

 
Divestments
 
September
French corporation Veolia ends its investment in the Jerusalem Light Rail (JLR), a rail system built to facilitate the growth and expansion of Israeli settlements on occupied Palestinian territory. The sale of its stake in the JLR project ends all of Veolia’s involvement in the Israeli market.
 
June 
The United Church of Christ, a Protestant denomination in the USA with around a million members, unanimously approved an Israel divestment resolution in June.  
 
G4S announced that it will end its Israeli prison contracts within the next three years.  
 
May
In 2015 the Bill & Melinda Gates Foundation sold its stake in G4S.
 
 
April 
Barclays is no longer listed as a shareholder in Elbit Systems, the major Israeli military company that manufactures drones used in Israel’s attacks on Palestinians and helps Israel build its illegal Apartheid wall.The news follows a high profile campaign launched after Barclays emerged as the named owner of $2.9 million worth of shares in Elbit.
More than 1.7 million people signed a petition organised by Avaaz calling on Barclays to divest from Elbit Systems and campaigners have occupied and protested at bank branches across the UK.
 
 
Last year
Israel lost around 50% of its foreign direct investment in 2014 due largely to its attacks on Gaza that summer and the growth of the Boycott, Divestment and Sanctions (BDS) movement.
 
The World Investment Report, published by the United Nations Conference on Trade and Development (UNCTAD), shows that €5.7 billion was invested into the country in 2014 in comparison with €10.5 billion in 2013. Dr Ronny Manos, one of the report’s authors, told Israeli news website Ynet News: “We believe that what led to the drop in investment in Israel are [the Israeli Defence Forces’] Operation Protective Edge and the boycotts Israel is facing”.
 
Last year, Finance Minister Yair Lapid said boycotts will have devastating effects on the Israeli economy, predicting a loss in export earnings of $5.7 billion and 10,000 jobs.
 
Dutch pension fund
In addition the Dutch pension fund PGGM announced that it had withdrawn tens of millions of Euros worth of investments from five Israeli banks. 
 
Universities
In just the first three months of the 2014/15 academic term, student bodies at five US universities took successful divestment votes, with two more failing. 
 
In the 2013-14 academic year, fifteen campuses proposed joining BDS while in the 
2012-13 academic year this figure was just eight. 
 
Similarities between the campaigns
Both of these successful campaigns share a number of similarities:
 
  • They were started by grassroots groups.
  • They are global movements and have global reach. 
  • They have asks for consumer investors, institutional investors and governments. 
  • They are heavily backed by church groups.
  • They rely on student mobilisations.
  • They have individual named targets as well as broad appeal / willing to take small steps – e.g. 
i. divest from X company 
ii. or divest from a particular sector of the target subject e.g. start by divesting from coal or those involved in military supplies in the case of Israel.
They sit within and fill the gaps left by international action.
 
Parallels with Anti-Apartheid Actions
 
The historical precedent for a successful divestment campaign is the divestment campaign which helped end the apartheid system in South Africa. 
 
The movement sat within a general mood of international hostility towards the apartheid regime. This antipathy could be found at the highest levels e.g. in the UN – which had passed motions against apartheid as early as 1964. This has echoes in both UN action on climate change and on Israel. 
 
In all cases the action of the UN didn't or hasn't gone far enough and civil society action has filled the gap.
 
Student mobilisation was critical

The anti-Apartheid disinvestment campaign on campuses had their first big success in 1978 with Michigan State University divestment.
 
This was followed by divestiture at Columbia University and the University of Wisconsin–Madison n 1982. 
 
Surge from media coverage
 
Activism surged in 1984 on the wave of public interest created by the wide television coverage of the then recent resistance efforts of the black South Africans.  
 
We can see this in the case of Israel – our own webstats show a 1000% rise in people visiting our DBS pages during Israeli incursions into Gaza last year. We expect the Paris Climate talks to produce the same effect.
 
City's and states played an important role
 
City and County of San Francisco, which passed legislation on June 5, 1978 not to invest “in corporations and banks doing business in or with South Africa". 
 
Eventually several laws came into play in the US which essentially gave backing to the anti- apartheid movement:
 
  • Comprehensive Anti-Apartheid Act
  • Budget Reconciliation Act

 

This key aspect appears to be missing from both the BDS and climate divestment movements at present. And sadly looks set to continue for the near future. 
 
Impacts
 
The disinvestment campaign only impacted South Africa after the major Western nations, including the United States, got involved beginning in mid-1984. From 1984 onwards, according to Richard Knight, because of the disinvestment campaign and the repayment of foreign loans, South Africa experienced considerable capital flight. The net capital movement out of South Africa was:
"R9.2 billion in 1985"
"R6.1 billion in 1986"
"R3.1 billion in 1987"
"R5.5 billion in 1988."
 
 
Key learnings
 
Identifying Risk
The success of a divestment campaign appears to comes down to risk and spelling out the risk to differing groups.
 
This could be risk in terms of PR and / or risk in terms long term business decisions. 
In the case of coal a climate change causing non renewable source of energy – that is fast running out the case is clear both morally and financially. And that is probably why many of the victories in the case of carbon divestment campaign have been around coal divestment.
 
In the case of Israel this idea of risk also seems to have been clearly articulated. The country cannot continue to flout international law indefinitely ( investment in the settlements are at risk) and the moral argument for a solution to the crisis which acknowledges the rights of Palestinians has arguably been won providing a PR risk for any companies involved. 
 
Calls for BDS are clearly working and the reaction has been draconian laws against BDS passed in the US senate.
 
The role of consumers
 
Customers of key institutions can also play an important role. The best example of this would be the recent consumer intervention in the Co-op bank take over. 
 
The Save Our Bank campaign (launched by Ethical Consumer) successful got the new investors in the bank to formally adopt an ethically policy – one which was arguably stronger than the one the bank had before it was taken over by hedge funds. 
 
Pertinent to this discussion is the inclusion of the following:
  • “We will not provide banking services to any business, organisation or government that: Manufactures or transfers indiscriminate weapons (e.g. cluster bombs and depleted uranium munitions), torture equipment or other equipment that is used in the violation of human rights, or armaments supplied to oppressive regimes.” 
  • In this instance the risk to the new owners became clear as the campaign developed. 
  • This was both on a PR level and on a business level. Existing customers would leave of the bank did not stick to its principles while the PR risk involved with dropping its ethics while mired in other scandal were too great to risk. 
 
 
Strong research
In Norwary the victory re coal divestment was won off the back of a report from urgewald and Greenpeace Norway and Framtiden i våre hender. This clearly showed where the Norwegian oil fund was heavily invested in coal companies.
 
It gained wide media attention and provided solid numbers and facts to politicians, the media and public. This helped shape and “own” the debate in Norway. Key was creating a list of companies that should be divested from.
 
 
Build alliances and coordinate
See above – plus global partners such as 350.org and wwf,  Avaaz as well, and spread much of our strategy with certain student groups, labour unions, religious faith groups, political parties and development aid organizations. This can also help to muster resources.
 
To understand the processes involved
How do organisations make decisions?
When do they make decisions?
How can that process be influenced directly?
 
Board communications strategy
A. the message 
1. facts and figures – politicians / technocrats.
2. tell human stories – for mobilising support of general public.
B. the channels - everything from newspaper ads, to lobbying to petitions. 
 
The need for change at the top
We see from the anti-Apartheid movement there is a real need to pressure politicians and have legislative instruments
 
 
 
Discover our Israel boycott page to read more about the Boycott, Divestment and Sanctions Movement. 
 
 

 

 

 

 

 


 

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