Co-op invests in West Bank-linked Veolia and Alstom despite misgivings

Investor takes “pragmatic” view of companies’ operations

The Co-operative Asset Management has decided it can invest in French engineering companies Veolia and Alstom – despite having misgivings about their role in the Jerusalem Light Rail Transit project linking Western and Eastern Jerusalem.

Other investors such as the Swedish AP buffer funds are in dialogue with [corrected from “have excluded”] the companies over their operations in the West Bank.

But the Co-op – which manages more than £19bn (€21.5bn) for intermediaries and pension funds, life companies and other institutions – has taken a pragmatic view after an internal debate. It’s taken into account the fact that improved infrastructure “could be seen as benefiting the oppressed by creating amenity for residents” – and that the two firms have positive characteristics in the areas of energy efficiency, decarbonisation, clean tech and other environmental services.

It rejected what it called an “absolutist” stance: where any activity that normalises the situation is seen as underwriting Israel’s occupation.

“As regards Veolia Environnement and Alstom, and taking into account their respective portfolios of environmentally friendly offerings globally, the committee’s advice was that these companies couldbe invested in as the benefits of the light rail project are real and it appears to have the support of the communities affected,” the Co-op says in its latest engagement report.

“The OPT [Occupied Palestinian Territories] is perhaps the most contentious geo-political question of our time,” the firm acknowledges. “Corporate involvement accordingly is something many of our customers may be uncomfortable with.”

The Co-op also reported that security firm G4S has decided to exit some West Bank-linked contracts involving checkpoints, prisons and police stations, following engagement with investors. “We welcome the company’s decision to withdraw from its most contentious contracts in the region and have encouraged it to further develop its human rights policies and practice to avoid contributing to oppression or violations anywhere in the world,” the Co-op said.

The Co-op added that it sent 203 letters to companies detailing its intention to vote against management resolutions at annual general meetings. “We were pleased, but not altogether surprised, to see the response rate from companies increase by more than threefold from 2009.” Link