Is your 401(k) funding state violence and human rights violations?

Many of us who care about social justice don’t realize that our city, university, congregation, or even retirement fund might be invested in human rights violations. Owning company stocks means we have a financial stake in the company’s success and therefore in whatever the company does. It’s relatively easy to sign petitions and contact our representatives to protest mass incarceration, border militarization, or family separation. It’s more difficult to trace our own complicity in these oppressive institutions.

AFSC’s Investigate website makes it easier. You can use it to screen your investment portfolio and align your investments with your values. Learn about the corporate interests behind state violence. Engage with institutions you are affiliated with – like your pension fund, city, church – to help them invest more ethically.

What is Investigate?

Investigate is an information hub, online database, and investment screening tool that focuses on corporate involvement in state violence and human rights violations. Responsible investors and campaigns targeting institutional investors can use it to scan stock portfolios and mutual funds for involvement in state violence. We also offer a shortlist of companies we recommend for divestment, because they are consistently and knowingly involved in particularly harmful practices and are unresponsive to stakeholder concerns on these issues.

Investigate currently covers three issue areas:

• Borders – our newest addition – includes companies involved in the militarization of the U.S.-Mexico border through building and monitoring walls and fences, immigrant detention, and the surveillance of immigrants. Recently, we looked at companies like Elbit Systems, which erects surveillance towers on the border, and General Dynamics and Amazon, which surveil immigrant communities.
• Prisons – including not only private prison companies, but also companies that provide services, such as banking and transportation, to government-run prisons. We also examine corporate involvement in prison labor and the growing industry of “e-carceration.”
• Occupations – includes companies involved in the occupation of Palestine and the Golan Heights through illegal settlements, the plunder of natural resources, the separation wall, as well as the military companies whose weapons are used to commit war crimes.

You can use Investigate to scan your own list of stock holdings or any major U.S. mutual fund to see if it includes any of the companies in our database. If you have a pension fund, you are most likely invested in mutual funds. These funds are operated by money managers who make decisions on your behalf. But it is still your money, and you should at least know what you are invested in.

If your investments include one of the companies in our database, we encourage you to do something about it. One option is to divest.

What is divestment, and how does it work?

Divestment can mean different things. For companies, it typically means pulling out of certain business activities or selling a subsidiary. For investors, it can mean selling stocks of certain companies or pledging not to buy them. For activists, it can mean cutting all ties to a company, institution, or industry.

Divestment can be very effective. When large companies are confronted over their involvement in human rights violations, including the potential risks – controversy, reputational, regulatory – many divest from these activities. This provides the public with an important mechanism for corporate accountability. After all, large corporations wield more power than most governments. Changing corporate policies can therefore effect social change.

Over the past decade, we have taken several companies off our divestment list, or removed them altogether from the Investigate database, after they changed their activities. This includes large multinationals, such as Europcar, Orange, Veolia, and Unilever. We urge all companies on our database to divest from state violence, and we encourage their consumers, investors, and business partners to demand change.

How to divest – and what if you can’t

A growing number of funds and institutions consider themselves “socially responsible,” which means they can use social considerations in their investment decisions. There is an entire industry of consultants and information providers that research and rank companies for socially responsible investors. However, many shy away from “political” issues, especially when it comes to state violence.

Investigate is a necessary intervention, providing information not available elsewhere and making the case for an uncompromising universal human rights investment screen.

Many institutional investors prefer to engage companies through dialogue or shareholder resolutions. Such investors might choose to divest as a last resort, after engagement fails. A recent example is the 2018 decision of the California State Teachers’ Retirement System, one of the largest pension funds in the U.S., to divest from private prison companies CoreCivic and GEO Group over their involvement in family separation.

However, most institutional investors in the U.S., including the largest ones - banks, pension funds, universities – are not “socially responsible.” For them, the only consideration is the bottom line, and their investment policies do not allow making ethical investment choices. AFSC supports campaigns that aim to change these policies.

If you’re invested in a company that violates human rights, you have few avenues for engaging it yourself. You can write to the company as an investor about your concerns or vote and ask questions at its annual shareholder meeting. But a large company is not likely to change its policy without facing the pressure of a sustained campaign.

Divesting might be your only way to signal that you are not interested in the dividends of state violence. If you have an investment manager, they can use Investigate to create a do-not-buy list tailored to your values. If you are invested through mutual funds or pension funds, you can talk to the fund manager, or switch funds.

But it all starts with knowing what you own.

How to get started

Visit afsc.org/investigate to learn about corporate involvement in state violence and human rights violations, find out if you are invested in these companies, and take action as a campaigner or ethical investor.

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Contact us if you need help tailoring specific screening recommendations for different investors, asset managers, or investment consultants.

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