After watching the Presbyterians vote down divestment another 3-4 times on Friday (and seeing them boo someone trying to continue to drag it back on the agenda), I decided I could take a couple of days off before wrapping up the PCUSA story.
But before that, it’s time to keep a promise I made before the Presbyterians took center stage to clarify any remaining confusion over the recent TIAA-CREF divestment story/hoax.
Now that a week or so has passed before that story broke, we can now say with certainty that any story indicating TIAA-CREF itself has engaged in BDS activity (i.e., politically motivated divestment from Israel) is unambiguously false.
The company still maintains close to a billion dollars worth of investments in Caterpillar Tractor, and they have made statements before, during and since the recent “divestment” announcement that they are neither making investment or divestment decisions based on Middle East politics (Israel-related or otherwise), nor are they responding to any political campaign (by Jewish Voice for Peace or anyone else) to make politically motivated divestment choices.
So stories that announce or imply that CREF has done anything but make automatic buy and sell choices based on existing indexes (financial or otherwise), especially those like this one that assign specific human and political motivation to such decisions, should be seen for what they are: a deliberate attempt to deceive the media and the public.
The second story associated with recent events has to do not with TIAA-CREF but with MSCI, an indexing organization that is followed by CREF and others. This organization, which maintains an investment index based on Environmental, Social and Governance (ESG) issues, did recently remove Caterpillar from its list of approved investments. And because MSCI indexes are followed by TIAA-CREF, this is the reason why CREF removed Caterpillar from the one fund it maintains that is tied to MSCI’s ESG-related recommendations.
Now to be fair, MSCI did release a statement saying that “The key factors determining the rating include a January 2012 labor dispute and subsequent plant closing in Canada, an on-going controversy associated with use of the company’s equipment in the occupied Palestinian territories, management of environmental issues, and employee safety.”
But the company also made another statement indicating that they use an “established methodology” to determine which companies are listed and de-listed. But, as previously noted, the company has an unambiguous way to specify a prohibition on certain countries (a prohibition they place on countries like Sudan, but not Israel). It could be that MSCI was responding to campaigns by JVP and others which put Caterpillar on their radar. The trouble is, MSCI also makes it clear that “decisions are not based on representations from interest groups.”
Fortunately, this most recent statement published by MSCI finally clears up this seeming inconsistency.
In it, they indicate where issues like the Middle East conflict fall into their decision-making matrix (as a component of “Community & Society” which constitutes 10% of their overall score for a company).
Significantly, they state explicitly that their analysts “do not make judgments on the positions of the interested parties” but rather follow political controversies (Middle East related and not) to determine if they might cause a risk to the investments or reputations of index members. In other words, because a controversy regarding Caterpillar and Israel exists, MSCI is professionally obligated to follow it (as they must follow any political controversies related to an investment), but only to determine if they pose financial or reputational risks to investors (not to make moral or political judgments on the parties or issues involved).
Given that MSCI is not a BDS organization, they most likely don’t see the Arab-Israeli conflict as the only issue impacting “Community and Society” in the universe. So, at most, this controversy must weigh as just a fraction of the 10% MSCI assigns the “Community and Society” category as a whole. But was this fraction of a percentage enough to tip the scales against Caterpillar this year?
Well apparently, this item has been incorporated into MSCI’s calculus since 2004, an eight year period during which it caused no changes to Caterpillar’s status. So was 2012 the tipping point when the boycotter’s cause célèbre finally got Caterpillar bounced? NO according to MSCI, (the horse’s mouth), who says that this political factor “did not trigger the rating downgrade in February 2012.”
So there you’ve got it. TIAA-CREF did not divest from Israel (again, defining divestment as the BDSers do as a decision to sell assets in order to make a political statement). And if MSCI used as a factor in its decision making “an on-going controversy associated with use of the company’s equipment in the occupied Palestinian territories,” that factor (1) could only have been weighted as fraction of 10% of their decision; (2) reflected no political or moral judgment on the part of MSCI regarding Caterpillar, Israel, the Palestinians or anyone else; (3) has been included in their decision-making for close to a decade without affecting MSCI’s inclusion of Caterpillar in their ESG indexes; and (4) did not play a role in this year’s decision to remove Caterpillar from their list of recommendations.
Walking through these details takes some time, and I’m sure the “TIAA-CREF/MSCI divested!” meme will continue to propagate and morph faster than this speed at which the truth can catch up. (In fact, a comment left here has somehow merged the TIAA-CREF, MSCI and Presbyterian stories to create a fiction whereby TIAA-CREF had divested not just from Caterpillar, but from other BDS targets – Motorola and Hewlett Packard as well.)
Now it is the propagandist’s job to stress any information that supports their version of events (even if it consists of a single phrase in a press release) and ignore all other information that might get in the way of their storyline (such as the subsequent statements noted above which provides the context and clarification needed to genuinely understand the issue). And I don’t in any way want to deny BDS activists the right to do their job.
But the rest of us are allowed to look at a picture bigger than JVP et al would prefer others to not think about. And we are also allowed to take into account the boycotter’s multi-year track record of trying to pass off business decisions as politically (i.e., BDSily) motivated, only to be exposed as trying to sell false information in an effort to generate momentum for their otherwise flailing cause.