Published by Mutual Fund Wire.
By Patricia Kelly
While Fidelity and Vanguard failed to step up to the plate, TIAA-CREF emerged as the first large U.S. fund firm to take up the banner of the anti-genocide investment cause, revealing on Monday that the firm sold stakes in four Asian oil companies alleged to have ties to the Sudanese government behind the Darfur genocide.
TIAA-CREF sold shares totaling $58 million as of September 30 2009, in China’s PetroChina Co Ltd, CNPC Hong Kong, Sinopec, and Oil and Natural Gas Corp of New Delhi (ONGC), according to Investors Against Genocide (IAG), a Boston-based activist organization. The company pushed through plans to divest after meetings with the target companies proved “insufficient.”
TIAA-CREF also met with a fifth company, PETRONAS, but decided not to divest shares of the firm. “We have not divested from PETRONAS, which has acknowledged our concerns and engaged in dialogue about how it might address them,” stated Roger W. Ferguson, Jr., TIAA-CREF’s chief executive.
The announcement on Monday marks a breakthrough for nonprofits like IAG, which have been pressuring large mutual fund firms to divest from companies believed to be funneling money into the hands of Sudanese government officials guilty of perpetrating massive human rights violations in Darfur and throughout Sudan. Until now, large companies including Fidelity, Vanguard, Franklin Templeton, and Capital Group Co. -– parent of American Funds -– have looked the other way, voting down proposals to divest from the region or increasing their shares in PetroChina as well as other companies on the target list.
“TIAA-CREF has recognized the unique importance of taking aggressive action in the face of genocide and crimes against humanity,” stated Eric Cohen, chairperson of Investors Against Genocide. “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.”
The company’s new investment policy applies to the genocide in Darfur as well as future genocides. Maybe now that one of their own has broken ranks and divested from Sudan, the other large U.S. fund firms will follow suit.
Company Press Release
TIAA-CREF Statement on Former Holdings in Companies with Ties to Sudan
New York, January 04, 2010 —
Last March TIAA-CREF announced plans to intensify pressure on five companies that maintain business relations with the government of Sudan to cease those relations or attempt to ease suffering and end genocide in Darfur.
At that time, TIAA-CREF said it would seek meetings with target companies – PetroChina, CNPC Hong Kong, Oil and Natural Gas Corporation, Sinopec, and PETRONAS – and would divest by year-end 2009 from those that refused to acknowledge the genocide and engage in a productive dialogue about how to confront it.
While TIAA-CREF met with each of the companies in the ensuing months, there was insufficient progress to warrant continued dialogue with PetroChina, CNPC Hong Kong, Oil and Natural Gas Corporation and Sinopec and, consequently, TIAA-CREF has sold its holdings in those companies across all funds and accounts as of December 31, 2009.
“Our decision to sell shares in these companies culminated a three-year effort to encourage them to end their ties to Sudan or attempt to end suffering there,” said Roger W. Ferguson, Jr., TIAA-CREF’s chef executive. “We have not divested from PETRONAS, which has acknowledged our concerns and engaged in dialogue about how it might address them.”
TIAA-CREF’s Policy Statement on Corporate Governance sets a high bar for divestment. The company’s decision regarding portfolio companies with ties to Sudan considered a number of factors. They included the gravity of TIAA-CREF’s concerns in Sudan, the likelihood of successful dialogue with target companies and a conclusion that divestment would have an insignificant impact on the financial performance of participants’ portfolios.
TIAA-CREF (www.tiaa-cref.org ) is a national financial services organization with more than $402 billion in combined assets under management (9/30/09) and the leading provider of retirement services in the academic, research, medical and cultural fields.