BDS and Socially Responsible Investment

Last weekend’s StandWithUs anti-BDS conference made clear that the BDS threat – despite recent setbacks – remains potent, but that the forces arrayed against it (including all those who attended this year’s SWU confab) are ready to meet the challenge.

As much as I’d like to run down each and every event I attended, I’m instead going to focus on a new front that’s opened up in the propaganda war against the Jewish state.

Actually, the front is not that new.  Rather, it’s another community that the boycotters have been playing under the radar, hoping their opponents wouldn’t spot what they were up to: socially responsible investors (SRI).

According to a breakfast speaker at the SWU event, the global capital investment market tops 241 trillion dollars, with an increasing percentage of those investments being managed by firms specializing in “socially concerned” or “ethically aware” investing.

Social concern and ethics are, of course, in the eye of the beholder.  During its infancy, SRI was able to identify obvious companies likely to generate controversy, such as tobacco firms and weapons manufacturers.  But as the SRI market gropes towards adolescence, other issues (such as care for the environment or treatment of workers) have emerged as consensus criteria to determine who is in and who is out of SRI-managed funds.

So far, so good one might think – especially if the consensus emerging is based on reasonable criteria such as solid research regarding which products and industries pollute or which companies and countries treat workers like dirt.  But if such decisions get made based on what people feel vs. know, this creates an opening that the forces of BDS are ready to drive a Caterpillar tractor through.

For example, any reasoned analysis would have established that SodaStream was/is a model employer with enlightened leadership dedicated to “doing well by doing good” for Palestinian workers (now unemployed thanks to BDS), not to mention the environment.  But by targeting SodaStream and making the company an anchor for their propaganda campaign, the boycotters have made the company controversial

As anyone who has ever worked in business will tell you, the last thing a company wants is to be associated with is unnecessary controversy.  Similarly, investors are more likely to categorize “good” vs. “bad” socially concerned investments based on newspaper headlines vs. thorough research and analysis.  The fact that switching investments in a world where investment opportunities are plentiful is relatively easy and painless makes it all the more likely that SRI decisions can get made based on hearsay or manufactured controversy.

This is why the boycotters have been cultivating the SRI community for several years, providing them their usual fact-free propaganda in hopes that the very controversies they have generated will become the reasons for SRI firms to exclude companies on the BDS blacklist from “socially aware” portfolios.

If this reminds you of the Hamas playbook of triggering wars and then demanding pity (and punishment of those who defend themselves) for the results, you’d be right.  And many of the same actors that only fly into “pro-peace” mode when people shoot back at their allies (such as the boycott brigade and the UN) are the very people trying to undermine Israel and companies investing in Israel within the SRI world.

Given this situation, it is time to ensure that the investment community is listening to more than one voice when it comes to the Middle East.  Like corporations and college administrations, investment firms (including SRI ones) are run by grown-ups, so it is likely that our side will be given a hearing – if and when we decide to come to the table.  And the momentum of anti-boycott legislation at the state and national level is likely to get the attention of investment firms who are still ultimately in the business of managing risk.

While Israel’s friends have not been focused on this aspect of the BDS threat, we are involved in the investment world – including the world of SRI.  So it’s time to call your broker, respond to (rather than just recycle) shareholder voting requests and tell anyone in the investment community that they are being played by a group of partisan hacks who are as unconcerned about the investors they are trying to con as they are about peace, justice, Palestinians or anyone/anything else, other than their own squalid campaign.