How to Divest | AFSC Investigate (2024)

The American Friends Service Committee (AFSC) has a long history of engagement in divestment campaigns and in responsible investment actions for peace and civil rights issues worldwide, including corporate accountability campaigns in the anti-apartheid movement, farmworkers' rights campaigns, the movement for nuclear disarmament, peace and anti-militarism campaigns, and struggles against mass incarceration and for the rights of immigrants.

As an investor, AFSC invests only in companies providing goods and services which people and peacetime industries need for everyday life. It refrains from investment in the military industries and major defense contractors, in nuclear power and fossil fuels, and in companies directly involved in other forms of state violence, such as mass incarceration, militarized borders and policing, mass surveillance, and military occupation.

The Economic Activism Program provides organizers and investors with tools and training for campaigns that face corporate power, expose corporate complicity in state violence and violations of human rights, help corporations move away from such harmful practices, and support the creation of public and transparent standards for corporate behavior.

Divestment is an act of tracing our own financial links to war, oppression, and exploitation, to use them as leverage to expose, isolate, and withdraw from these harmful social structures. As far as companies go, once they are exposed and confronted with the potential controversy and reputational and regulatory risks, many of them respond to engagement efforts by stakeholders, develop a human rights policy, or even step away from additional controversial activities.

We advocate divestment from all forms of state violence. On Investigate, we offer information and divestment recommendations on three such institutions: mass incarceration, military occupations, and the border and surveillance industries. Divestment is one of the main tools of Racial Justice Investing, in support of the struggle for Black lives, for Palestinian rights, and for immigrant justice. Each of these issues is a priority for AFSC's longstanding work, where we have detected a lack of available information and a need for investors and activists to come together and hold these harmful industries to account.

Different stakeholders in the companies listed on our database may choose to use different strategies to help companies divest and withdraw from these activities: they may engage with the companies, shame them, work with them to create better due diligence mechanisms and human rights policies, put consumer pressure on them, file shareholder resolutions, or dump their stocks.

We urge all companies listed on our database to divest from these harmful activities, and we hope that their consumers, investors, and business partners will use this information to demand that these companies make that transition, and help them in this process.

We urge responsible investors to refrain from owning stocks or bonds of the companies on our divestment list. Based on our assessment using the criteria detailed below, these companies would not respond to shareholder activism on these issues at this time, which makes the ownership of these securities a moral liability.

Our Divestment Criteria

The Investigate database is two-tiered. From our general list of companies, some are highlighted as targets for divestment. This recommendation is based on an assessment of three criteria: the salience of the human rights violation, the company's responsibility for the violation, and the company's responsiveness. These are explained below in detail.

Each criterion is evaluated on a 1-5 point scale, from least to most severe, leading to an overall score of 3-15 points for each company. We evaluate the companies in our database separately on their involvement in all three issues we track: the prison industry, military occupations, and border militarization. Companies that receive more than 10 points on any issue become part of our divestment recommendation.

Salience - the severity of the human rights violation and how harmful it is. Based on the UN Guiding Principles for Business and Human Rights Reporting Framework, it measures the severity of the negative impact of a company’s activities and/or business relationships. Salience does not measure the extent of the company’s stake in the said violation, nor its impact on the company’s revenue; it measures only the degree to which this violation is harmful to people. Salience is also adjusted by measuring the scale and scope of the violence.

Symbolic: Discrimination
Structural: Exploitation or sporadic indirect violence
Indirect: Large-scale systemic indirect physical violence or sporadic direct violence
Direct: Systemic direct physical violence
Severe: Large scale and severe direct physical violence

Responsibility - the degree of the company’s involvement in the human rights violation. It is assessed on a case by case basis and includes both the degree to which the company’s products and services contribute to the violation and the degree to which the company is knowingly and intentionally linked to the violation. For example, supplying custom-made crucial equipment or services would constitute a more significant involvement than the supply of an off-the-shelf product.

Normalize: The company’s relationships link to the violation.
Capitalize: The company’s activities, services, or products link to the violation.
Support: The company’s activities, services, or products exacerbate or contribute to the violation, or deliberately support it.
Facilitate: The company knowingly and intentionally provides products, activities, or services which exacerbate or enable the violation.
Enforce: The company’s activities cause the violation.

Responsiveness - the company’s responsiveness to multi-stakeholder engagement, as well as the continuity of its involvement, in the harmful activities. All companies listed on Investigate have full knowledge of the impact of their actions. Their responsiveness is assessed by monitoring the company’s attempts at dialogue and remediation as well as changes in corporate policies or activities.

Responsive: The company announced it would fully withdraw from the violation.
Responding: The company is changing its behavior, but not enough.
Dialogue: There is a dialogue or possibility of a dialogue with the company about this violation, with potential for improvement.
Nonresponsive: The company is unlikely to respond to stakeholders’ concerns.
Resistant: The company has not responded to public stakeholders’ concerns regarding the violation.

Our research and recommendations are updated regularly with changes in companies’ operations and responsiveness. Since the inception of the Investigate database in 2011, we have removed more than 20 companies. We hope that our database continues to shrink as companies divest from state violence.

Our divestment list is neither a “black-list” nor a boycott list. We use it to advocate for a specific course of action relevant for investors, and we recognize that different stakeholders might have different opportunities to promote the same goals. Please contact us if you need assistance in tailoring specific screening recommendations for different investors, asset managers, or investment consultants.

Divestment from the Border and Surveillance Industries

With the increased militarization of borders all around the world and the unprecedented expansion of state surveillance systems designed to criminalize and hunt down immigrants and refugees, ethical investors must learn to identify this newly-defined and ever-growing military-surveillance industrial complex. Community groups and organizations should call on universities, cities, unions, faith organizations, endowments, and pension funds to divest for immigrant justice and withdraw from any partnership with the surveillance high tech and security industries.

The American Friends Service Committee does not investin companies which consistently, knowingly, and directly facilitate and enable state violence and repression, including in the industries of border security, militarized policing, and mass surveillance. Many of these companies are large military contractors or weapons companies, already excluded by AFSC's policy banning investment in military and weapons companies. Other mass surveillance firms are large high tech companies whose specific activities are carefully assessed to determine their human rights impact and the companies' responsiveness to the concerns voiced by the public, their own employees, and investors.

Divestment from the Prison Industry

The American Friends Service Committee does not investin companies which consistently, knowingly, and directly facilitate and enable mass incarceration and detention, including those providing prison and jail services, transportation and deportation services, bond services, reentry and other "community corrections" services, electronic monitoring, or companies which use prison labor.

We encourage other institutional investors to adopt a similar policy, to expand the idea of "prison divestment" beyond the focus on private prison operators, and to help isolate the main culprits that drive the mass criminal punishment system in the U.S.

We hope that our research will help investors refrain from any investment in the prison industry unless they intend to use it for corporate engagement and shareholder activism to help companies change their policies and transition out of this industry.

Divestment from the Occupation Industry

The American Friends Service Committee has worked with Palestinians and Israelis for peace and justice for over 70 years. The principles that guide AFSC's work in this area are outlined in the document "Principles for a Just and Lasting Peace between Palestinians and Israelis," which was first approved by AFSC's board of directors in 1999. These principles hold that peace will only be realized if both Palestinians' and Israelis' rights are recognized and the structural injustices between peoples have ended.

The AFSC Investment Policy states that "[i]nvestments should not be made in...companies that facilitate and enable violations of international law and human rights as part of the Israeli occupation of Palestinian and Syrian lands and/or as part of Israeli apartheid." The Policy refers only to Israeli violations, since all investment which might support Palestinian militant groups is already banned by U.S. law.

We see this as our response to the 2005 Palestinian Civil Society Call for BDS, as well as the implementation of AFSC's vision and mission statement, in line with our commitment to divest from all forms of state violence and militarism.

Using the Investigate human rights rating system, we recommend divestment from companies with a substantial, ongoing, and intentional complicity in severe violations of human rights and human rights law, including through their involvement in:

The Settlement Industry - companies that support and maintain illegal settlements in occupied lands.
Exploitation of Natural Resources - companies involved in the exploitation and plundering of natural resources in occupied lands.
Wall and Checkpoints - companies that support the system of severe travel restrictions Israel imposes on Palestinians.
Weapons and Military Equipment - companies that provide militant groups in Palestine/Israel with weapons and militarized equipment specifically designed for and consistently used in war crimes or attacks on civilians.
Discrimination - companies that discriminate against Palestinians in their services or goods, in the workplace, or by exploiting the unequal and discriminatory legal situation for their commercial benefit.

Over the last several years, several large corporations were taken off our divestment list or altogether from the Investigate database after they changed their activities on the ground. This includes, for example, CRH, SodaStream, Veolia Environnement, HP Inc., Orange, which followed Unilever, Assa Abloy, and the privately-owned companies Keter Plastic and Barkan Wineries. Other companies, which have changed or announced a change in their West Bank business operations, remain under close observation: Caterpillar, Cemex, and Fosun International.