Over a week ago, anti-Israel blogger Richard Silverstein acccused pro-Israel organization StandWithUs of outright lying, in regards to the reason behind a downgrade in Caterpillar’s stock.
Many of you are aware that TIAA-CREF’s Social Choice portfolio ditched it’s $72-million investment in Caterpillar after the long-standing BDS campaign by Jewish Voice for Peace and other Israeli-Palestinian peace activists. The investment company’s action was precipitated by a downgrade of Caterpillar stock by a rating firm. Here is part of that company’s statement:
MSCI Inc. said Caterpillar was downgraded earlier this year because of several concerns, including a January labor dispute in Canada, environmental issues, employee safety and “an ongoing controversy associated with use of the company’s equipment in the occupied Palestinian territories.”
No more credible a Jewish news outlet than the Forward wrote this:
Controversy over the Israeli army’s use of Caterpillar Inc. bulldozers to demolish Palestinian homes was a “key factor” in a corporate rating agency’s decision to drop the American manufacturer from its list of socially responsible companies.
Yet, StandWithUs is so eager to score points any which way it can against JVP that it will even stoop to outright lies. In its own press release it wrote:
According to MSCI officials, CAT was downgraded because of labor disputes at a CAT plant in Canada, not because of the Palestinian-Israeli conflict.
For anyone wishing to give SWU the benefit of the doubt, the above statement was released on June 22nd and MSCI released its own statement quoted above on June 25th. Even if SWU wasn’t lying outright, it was flat-out WRONG. I’m waiting for the SWU press release that “clarifies” their error and updates with the correct information. OK, start holding your breath…right…now…Now you may exhale. I didn’t expect you to suffocate waiting for SWU to correct the record.
Well, this just in direct from MSCI:
Why was Caterpillar removed from several MSCI ESG Indices?
Caterpillar was removed from several MSCI ESG Indices due to an Environmental, Social and Governance (ESG) rating downgrade. The company was removed from the MSCI World ESG Index, the MSCI USA ESG Index and the MSCI USA IMI ESG Index on March 1, 2012, following the February Index Review.
The MSCI Global ESG Indices are broad, diversified equity indices comprised of companies with high ESG ratings relative to their sector peers. Applying a Best-in-Class methodology, the MSCI ESG Indices target companies with the highest ESG ratings making up 50% of the market capitalization in each sector. A minimum ‘B’ rating is required to qualify for the MSCI ESG Indices. MSCI ESG Indices are managed using transparent, rules-based methodologies that are publicly available on this website. The methodologies are designed so that the standards for inclusion and removal are objective and consistent.
To determine the composition of the MSCI ESG Indices, MSCI utilizes ESG ratings and other information compiled by MSCI ESG Research. MSCI ESG Research provides research products and services to asset owners and asset managers for incorporating ESG factors into their investments. MSCI ESG Research provides a range of products and services, including ESG ratings, controversy assessments, and business involvement screens. MSCI ESG Research is the successor to ESG pioneers KLD, Innovest and IRRC, which were acquired through MSCI’s acquisition of RiskMetrics. The MSCI ESG Indices use ratings and other data, analysis and information supplied by MSCI ESG Research. MSCI ESG Research is produced by MSCI’s subsidiary, Institutional Shareholder Services Inc. (“ISS”) or its subsidiaries.
In February 2012, Caterpillar’s ESG rating was downgraded by MSCI ESG Research from ‘B’ to ‘CCC’ due to declining ESG performance associated with management of its Employees & Supply Chain challenges. This rating change was initiated following a controversial lockout and plant closing at the company’s London, Ontario, locomotive plant.
How does the use of Caterpillar equipment by Israeli Defense Forces in the Occupied Palestinian Territories affect the company’s rating?
Caterpillar is involved in a long running controversy regarding the use of its bulldozers by the Israeli Defense Forces in the Occupied Palestinian Territories.
This controversy is accounted for in the Community & Society Pillar rating. The Community & Society Pillar accounts for 10% of a company’s ESG rating in the Construction & Farm Machinery & Heavy Trucks industry. As part of its ongoing evaluation of companies, MSCI ESG Research analysts assess controversies associated with ESG issues which may potentially pose investment or reputational risks for investors. The analysts document and appraise the significance of such controversies with regard to investor risk, but do not make judgments on the positions of interested parties.
MSCI ESG Research has assessed this human rights controversy since 2004. This controversy has been incorporated in the rating since then and, as such, did not trigger the ratings downgrade in February 2012.
Now it is true that Silverstein got his original information from here, so I won’t employ his own smear tactics and accuse him here of “outright lying.” But given I have now posted this accurate information (and will let him know via Twitter), I demand he “clarifies” his error and updates with the correct information.
OK, start holding your breath…right…now…
(hat tip: EoZ).