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TIAA-CREF Divests from Sudan, Genocide-Free Investing Gets A Boost

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TIAA-CREF Divests from Sudan, Genocide-Free Investing Gets A Boost

Posted by Laura Heaton on January 5, 2010

TIAA-CREF Divests from Sudan, Genocide-Free Investing Gets A Boost

Making good on promises made last year to become the first major mainstream financial services firm to commit to genocide-free investing, TIAA-CREF announced yesterday that it divested its shares in four major oil companies doing business in Sudan. Through their patronage, the four companies – PetroChina, CNPC Hong Kong, Sinopec (state-controlled Chinese companies), and India’s Oil and Natural Gas Corporation – all share responsibility for funding the genocide in Darfur.

TIAA-CREF, which manages more than $400 billion in assets, leads the way as the first company of its kind to take a stand against the genocidal regime in Khartoum. Until now, only U.S. state pension funds and non-profits had divested from Sudan. Despite the relatively small stake that TIAA-CREF held in the oil companies, the move strengthens the case for other companies to follow suit.

Emphasizing this point, the Boston-based group Investors Against Genocide issued a press release, quoting chairperson Eric Cohen:

"TIAA-CREF has recognized the unique importance of taking aggressive action in the face of genocide and crimes against humanity. TIAA-CREF is the first large, mainstream financial services company to take a public stand supporting the overwhelming majority of Americans who do not want their savings and pension funds connected to genocide. TIAA-CREF’s commitment to act sets a higher standard for the entire financial services industry."

In 2009, other investment firms weighed the possibility of divesting from Sudan as well, but the decisions were mixed. Investors Against Genocide’s Susan Morgan explained the shortcomings of Fidelity in this post for our blog last spring, and as Cohen reflected in yesterday’s press release, “Vanguard promoted a toothless policy which gives them the appearance of doing the right thing while actually doing nothing." The other bright spot in genocide-free investing came from iShares, which announced in November that it would develop a genocide-free investment option by creating a special exchange traded fund.

Cohen noted:

"When we began our campaign three years ago, investors had few mainstream options to avoid complicity in genocide. Now, options are becoming available. Moving forward, market forces will encourage other large mainstream financial services companies to follow suit. By doing the right thing, TIAA-CREF and iShares will benefit from new customers who do not want their personal savings tied to the genocide in Darfur or to future genocides."

TIAA-CREF’s announcement yesterday marked the end of a period of negotiations with each company in which ultimately the two sides could not see eye-to-eye. Quoted by Reuters, Hye-Won Choi, TIAA-CREF’s head of corporate governance, said: "We always believe engagement is far more effective than divestment. (…) However, in this situation, engagement was not effective, and we believed the gravity and magnitude of the situation in the Sudan required a different response."