It’s not just TIAA-CREF — leading Wall Street firm drops Caterpillar from ‘Socially Responsible’ investment index

Israel/Palestine

More major news on the Caterpillar divestment front. One of Wall Street’s leading investment advisers has stripped Caterpillar from its recommended list of “socially-responsible” companies– apparently because of Caterpillar’s service to the Israeli occupation. 

The news comes from the US Campaign to End the Israeli Occupation, which announced to supporters:

We are so excited to announce that as of this week, Caterpillar was removed from the MSCI World Socially Responsible Index, a list used by Socially Responsible Investment (SRI) funds to discern acceptable companies for investment.

We placed a call to MSCI today, seeking official confirmation of the news. We have yet to get a call back.

MSCI offers investment advice to 6,200 clients around the world, from pension plans to “boutique hedge funds.” It was part of Morgan Stanley until 2009, when the company was spun off into a separate entity, and its socially responsible investment index is a leading resource among socially responsible investment (SRI) funds.

According to the MSCI website, the World Socially Responsible Index “eliminates all companies in the parent index that are involved in nuclear power, tobacco, alcohol, gambling, military weapons, civilian firearms, genetically modified organisms (GMOs) and adult entertainment.”

The MSCI index is regularly featured in journalism in the world of socially-responsible investing. The index was used in a recent award-winning study on the higher costs of raising money for companies that don’t follow socially-responsible guidelines. 

For more on the MSCI World Socially Responsible Indices, see here (pdf).

Update: This post has been changed to reflect the fact that MSCI is not an investment adviser but, as its site says, a “provider of investment decision support tools, including indices, portfolio risk and performance analytics and corporate governance services.”

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