2022 Anti-Israel Shareholder Activism Points to Broader Divestment Strategy

Shareholders of publicly traded companies in the United States have long proposed resolutions to encourage more responsible corporate behavior. These can include demands to divest from certain funds or entities, uphold codes of conduct or make tangible commitments to improving business practices. This type of activism dates to the 1970s and is used by a range of organizations to garner support for their causes. Anti-Israel activists and investors with anti-weapons investment screens or anti-Israel investment mandates use shareholder resolutions as a tool in a broader strategy to target companies that do business in or with Israel. While certainly not all criticism of Israel is antisemitic or done in bad faith, many shareholder resolution campaigns are orchestrated by proponents of BDS (boycott, divestment, sanctions) and provide simplistic, unconstructive answers to the complex Israeli-Palestinian conflict, and do not advocate for the advancement of Israeli-Palestinian dialogue, mutual understanding and peace.  

Since at least 1994, activists have proposed resolutions designed to stop companies like Motorola Solutions, Raytheon, Cisco Systems, Boeing and Caterpillar from serving communities located in the West Bank or selling weapons to the country.

According to an ADL analysis of the 481 investor resolutions at Fortune 500 companies that were registered with the SEC, nineteen (or four percent) called for the corporations to address alleged human rights violations in countries with which they did business. The majority of those nineteen resolutions targeted China, especially for its treatment of Uyghurs, but five resolutions (or one percent of the total) targeted Israel. The resolutions were filed by shareholders at Amazon, Alphabet/Google, Caterpillar, General Dynamics, and Lockheed Martin. 

Additionally, one resolution filed at PNC Bank does not name Israel in its primary text but refers to Israel’s military activities as a source of concern in the supporting documentation.
None of these resolutions passed.

Most of the resolutions that targeted Israel did so by calling for the companies to conduct ‘’human rights assessments.” Such assessments alert businesses to the potential human rights impact of their presence in region or country – in this case the impact of a company’s continued business with Israel on Palestinians. Rather than addressing legitimate human rights concerns, however, the campaigns that accompany these resolutions offer a simplistic answer to an increasingly protracted and complicated conflict.

These assessments or failure to produce them can be used as a cudgel by anti-Israel activists to press the companies to scale back their business in Israel. For example, in 2014, the Presbyterian Church’s Mission Responsibility Through Investment corporate engagement report describes HP’s human rights assessment, especially as it pertained to the Israeli-Palestinian conflict, as less than satisfactory and cause for continued engagement with the company on the issue. In 2018, the Episcopal Church’s investment arm filed a shareholder resolution with Bookings.com asking the company to assess and report back to shareholders its policies and procedures for business in conflict affected areas -- specifically regarding rental properties in Israeli settlements in the West Bank.  The request for the assessment was a part of the church’s engagement strategy to encourage Bookings to leave conflict affected areas, including the West Bank entirely. 

Caterpillar, General Dynamics, Lockheed Martin and PNC have all encountered this type of anti-Israel shareholder activism before. Caterpillar has been one of the longest running targets for anti-Israel activists, who have opposed Israel’s use of heavy construction equipment since at least 2002, though the 2003 death of Rachel Corrie, an American activist killed while protesting Israeli demolition of a refugee camp, escalated the campaign and gave it a symbol. The earliest Caterpillar shareholder resolution dates to 2004, when activists called for Caterpillar to reassess its business relationships with Israel. 

2022 was the first year that anti-Israel activists targeted Alphabet and Amazon, which are contracted to provide cloud computing and other technology services to Israel’s government as part of ‘Project Nimbus,’ an effort develop Israel’s cloud computing infrastructure. Opposition to Alphabet and Amazon’s participation in Project Nimbus is coordinated by a coalition called “NoTechforApartheid,” spearheaded by activist groups Jewish Voice for Peace and MPower Change. 

Perhaps because the campaign organizers calculated that shareholders were likely to reject explicit calls to drop the contract (which is worth up to $1.2 billion to the two companies combined), they formulated these resolutions as requests that the companies produce or commission reports assessing how their work under the contract could have a deleterious impact on human rights. The Alphabet/Google resolution was filed by Ed Feigen, a Google shareholder since 2014 and member of Jewish Voice for Peace. Neither resolution passed in 2022, but the broader #NoTechForApartheid campaign is ongoing.

According to activist groups Investor Advocates for Social Justice and the UN PRI database, activists also filed anti-Israel resolutions with Northrup Grumman and Nvidia, but they were not put before shareholders for a vote. In the case of Northrup Grumman, the company successfully argued that the resolution, which called for a human rights assessment, should be excluded from its proxy balloting in 2022 because a substantially similar resolution had already been submitted for several years in a row. At Nvidia, the activist shareholders voluntarily agreed to withdraw the resolution calling for the company to conduct “customer due diligence” regarding its relationship with Israel, China, and Saudi Arabia, because it had already “achieved significant commitments” from the company on that issue, according to a press release from the Presbyterian Church (USA), which filed the resolution.

These resolutions, while unsuccessful, have an impact. Organizations file resolutions repeatedly until they get the change they want, often garnering more votes each year. Even if a proposal fails, sometimes just the fact that it is filed may be enough make a company wary of doing business with Israel. Failed proposals may also alert other companies to potential reputational risks and avoid moving contracts or projects with Israel or Israeli companies forward to avoid similar campaigns. 

Looking to the future, and as 2023 shareholder proposals roll in, we expect to see the return of Project Nimbus related proposals. Additionally, we can expect to see continued focus on Israel’s relationships with weapons companies, proposals around Israeli drone and surveillance technology partnerships and renewed interest in companies such as PayPal and other service providers.