Israeli banks on ineligible list for pension agency
A recent decision by The United Methodist Church’s pension fund regarding investments in five Israeli banks is in keeping with its plan to use a human rights guideline for investments, announced a year ago.
The banks are Bank Hapoalim, Bank Leumi, First International Bank of Israel, Israel Discount Bank and Bank Mizrahi-Tefahot.
United Methodist Kairos Response, an advocacy group, said in a press release distributed widely Jan. 12 that it was pleased with the pension agency’s action to declare “the five largest Israeli banks off limits for investment.”
The group called the move “the first time a major church pension fund has acted to preclude investment in Israeli banks that sustain Israel’s illegal occupation of Palestinian land.”
Susanne Hoder, a spokesperson for Kairos Response, cited the action as a positive step. “Our goal all along had just been to have our investments reflect the position of the church,” she told United Methodist News Service.
But, she added, other pension fund actions are not consistent with a resolution from the 2012 United Methodist Book of Resolutions that opposes the continued military occupation of the West Bank, Gaza, and East Jerusalem and building of illegal Jewish settlements.
“We have been disappointed to learn that our pension fund still holds investments in companies that are located inside the illegal settlements,” Hoder said.
In a statement prepared for the press, the Board of Pension and Health Benefits and its Wespath Investment Management division responded to the statement from Kairos Response by noting that the Human Rights Investment Policy Guideline, implemented throughout 2015, applies to 14 different regions around the world, including the Middle East.
“We have sold our holdings in Bank Leumi and Bank Hapoalim which represented less than $3 million. We remain invested in approximately 18 Israeli companies that meet our investment criteria,” the statement said.
Wespath Investment Management posted a news release on its website last month about the implementation of the guideline, which “provides direction for corporate engagement actions and highlights human rights-related risks that could potentially affect the value of investment assets.”
The pension agency said it prefers to use its influence as a shareholder to change company practices and improve human rights protections. In some cases, however, it appears a company is unlikely or unable to discontinue activities in regions classified as “high risk” by the agency. Israel-Palestine is identified as one of those regions.
Included among the 39 companies named are the five Israeli banks. Also on the list is Shikun & Binui, an Israeli firm involved in construction in the West Bank, says Kairos Response.
“When activities in high-risk countries and areas represent a significant part of a company’s business, we will avoid investing until the company has changed its business practices,” the Wespath release stated. “Avoiding such investments supports our commitment to sustainable investing, which we believe ultimately improves the performance of our investment funds.”
The Rev. Susan Henry-Crowe, top executive of the United Methodist Board of Church and Society, said her agency “appreciate the continuing work of the General Board of Pension to uphold human rights around the world.”
Her agency is responsible for advocating the church’s social teachings. “This is a step forward in the worldwide struggle for justice and peace, and helps The United Methodist Church further live out our mission of transforming the world,” Henry-Crowe said.
The Israeli Embassy in Washington did not immediately respond to a request for comment on the action by the pension fund, which was valued at $20.9 billion in 2014. In a press release, the Anti-Defamation League called the pension fund’s “blacklisting” of the Israeli banks “misguided in intent and misleading in perception.”
The issue of divesting from Israeli companies continues to be debated within the denomination. The 2012 United Methodist General Conference, the denomination’s top legislative body, defeated a proposal for divestment from three companies whose products are used by the Israeli military in the occupied Palestinian territories.
Petitions related to divestment or investment screenings have been submitted by various church entities for consideration at the 2016 General Conference this May in Portland, Oregon, including the United Methodist Board of Church and Society.
Kairos Response has submitted four proposals to General Conference. Three would require divesting from companies involved with the Israeli occupation and another would establish a screen for investments in companies doing business in any illegal settlements on a global basis.
Bloom is a United Methodist News Service multimedia reporter based in New York. Follow her at http://twitter.com/umcscribe or contact her at (646) 369-3759 or email@example.com. Sam Hodges in Dallas also contributed to this story.