American Funds, one of the largest mutual fund companies, has joined the growing ranks of investment firms whose shareholders have voted to stop doing business with a prominent Chinese oil company blamed for helping to finance state-sponsored violence in Sudan. The shares amount to an estimated $189 million.
The announcement from Investors Against Genocide came this week when American Funds revealed on its website that it had sold 99 percent of its shares in PetroChina.
“At the shareholder meeting on November 24, Investors Against Genocide asked American Funds to draw the line at investing in genocide,” said Eric Cohen, chairperson of Investors Against Genocide, a Boston-based group focused on convincing investment firms to divest from companies whose business supports the government of Sudan. “We see now that American Funds was listening. We congratulate American Funds for divesting from PetroChina.”
The move builds upon the momentum generated by similar recent actions by other investment firms. In Januray, TIAA-CREF announced it would sell its shares in four oil companies tied to the Sudanese regime, and iShares decided late last year to develop a Genocide-Free Exchange Traded Fund.
While U.S. sanctions against Sudan bar American companies from investing in the country, money from American investors funnels into Sudan through investments in foreign companies that continue to do business with the Sudanese regime. In particular, four major Asian oil companies have been blacklisted: PetroChina, Sinopec from China, ONGC from India, and Petronas from Malaysia.
As awareness among shareholders builds – and the press generated by American Fund’s move this week will help on that front – we’re likely to see other investment companies take a more conscientious line when it comes to the human rights abuses of the governments they fund. A poll cited in the press release from Investors Against Genocide found that 77 percent of respondents said they would switch to a different investment firm if they learned their current company held significant investments tied to Sudan.
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