“Taking sides” is a common term in corporate engagement, referring to businesses that receive and hang on the whims of progressive lobbyists while remaining indifferent or directly opposing concerns of Christian and conservative shareholders. Oftentimes, taking sides can have deleterious effects on businesses, destroying shareholder value and eroding brand confidence as the company allows politics to infect its fiduciary responsibility. Yet, sometimes taking sides takes on far more horrific consequences. Nowhere is this becoming more clear than in the ESG lobby’s push for American weapon companies to divest from Israel—and exacerbate an existing humanitarian crisis beyond anything that’s happening now.
Shareholder proposals calling for Israel divestment are showing up on companies' proxy statements, including Lockheed Martin, Raytheon, and Amazon Web Services—we’ve come a long way from Ben and Jerry’s Israel controversies. How do corporate activists push investors into divestment? In the case of Lockheed Martin, they employ one of ESG lobby’s favorite strategies: vaguely serious-sounding language pushed to political ends. As per a filing from Bowyer Research, a key ESG skeptic firm, pro-divestment activists accused Lockheed of complicity in ‘war crimes” due to its ongoing partnership with the IDF, a conveniently one-sided analysis of a war that began as an unprovoked attack against the state of Israel. Further, activists accuse Lockheed of contributing to ‘escalating violence’ in the region, additionally revealing a stunningly slanted analysis that views Israeli military operations as deserving of humanitarian skepticism, and Hamas’ military operations as business-as-usual.
The resolution will go to a vote at Lockheed’s annual meeting on May 2. But, as with many radical shareholder proposals, the telling thing isn’t about whether the proposal passes (it probably won’t). What’s telling is how it got there.
The push to disarm Israel is being led, perhaps ironically, by groups responsible for managing the funds of religious groups. Proposals like the one at Lockheed are being featured by groups like the Interfaith Center on Cultural Responsibility. The Center, as reported by Charlie Gasparino at the New York Post, represents ‘faith and value-based’ investors looking to bring an ethical perspective to their investments. Yet there are undeniable ethical questions with this approach—if ESG ideologues get their way and pull weapons partnerships from Israel, the tide of war turns in a way that, while palatable to a certain segment of the activist class, is not palatable to innocent Israeli civilians, many of them children, trapped in a war against enemies who have openly vowed to annihilate them. Divesting from Israel, despite what groups ranging from ESG activists to the virulently pro-Hamas protestors currently taking over Columbia University seem to think, means innocent children die—there’s no getting around that.
It’s time to stand up and reject the misinformed platitudes of the ESG movement, tactics that not only seek to waste shareholder money on lobbyists’ pet issues, but have successfully destroyed billions in brand value for the companies that give in to them. Yet, the movement’s push to divest from Israel is a reminder of how truly abhorrent ESG activism can be. Value-based free enterprise, and any remotely moral system of corporate engagement, doesn’t demand that countries be deprived of their ability to defend civilians to appease pampered activists half a world away. When it does demand such things, it’s worth grappling with the obvious question—has the movement become unfit for purpose?
