European financial institutions heavily invested in companies involved in illegal Israeli settlements
More than 700 European banks, asset managers, insurance companies and pension funds hold stocks and bonds worth USD 115 billion in 50 companies involved in activities that, according to the UN, raise particular human rights concerns. Company activities include settlement construction, service provision, demolition of Palestinian homes and surveillance of Palestinians. European financial institutions are also providing USD 171 billion in lending and underwriting to such companies.
A new report from “Don’t Buy into Occupation” (DBIO) - a coalition of 24 European and Palestinian organisations in seven European countries - reveals, for the second year in a row, that hundreds of European financial institutions are heavily invested in companies shoring up illegal Israeli residential, agricultural and industrial settlements in the Occupied Palestinian Territory.
“These companies play a critical role in the functioning, sustainability and expansion of illegal settlements. By lending to or investing in these companies, financial institutions are linking themselves to activities that violate international law”, said Willem Staes, DBIO coordinator.
Israeli settlements are illegal under international law and amount to a war crime and crimes against humanity. Settlement construction relies on the extensive appropriation of Palestinian land and unlawful population transfers in and out of occupied territory. Together with the military regime protecting them, the settlements exact a heavy toll on Palestinian rights, including freedom of movement, liberty and security, and an adequate standard of living. Settler violence against Palestinian communities, involving physical violence and intimidation, shooting with live ammunition, torching of fields and livestock, is continuously on the increase.
“Settlements are a fundamental component of Israel’s apartheid regime over the Palestinian people, and by lending direct or indirect support to this settler colonial enterprise, businesses are complicit in taking over Palestinian land, pillaging natural resources, and forcibly expelling Palestinians from their homes, and fall a long way short of their responsibilities”, said Inès Abdel Razek of Palestinian rights group PIPD, a DBIO coalition member.
Financial institutions are required by international guidelines on business and human rights to conduct heightened due diligence in areas under military occupation. Asset managers should be exercising leverage on investee companies to mitigate negative impacts, and ending financial relationships with companies unwilling to align with international law and human rights. This is clearly not happening at anything like the level required.
Amongst the largest creditors, in volume of lending, to companies involved with Israeli settlements are BNP Paribas, HSBC, Société Générale, Deutsche Bank and Barclays. On the investment side, the Norwegian Government Pension Fund Global, Crédit Agricole, Groupe BCPE, Deutsche Bank and Legal & General are the leading investors, with a combined holding of USD 44 billion.
The DBIO 2022 report shows that there are some honourable exceptions to the rule. Dutch pension fund ABP, Norwegian asset manager Storebrand, and Norway’s largest pension company KLP, have, in recent years, excluded companies active in places where they risk contributing to war crimes, including a significant number of companies actively doing business with the Israeli settlements.
“Financial institutions would do well to look to their peers who are not just taking the lead on these issues, but are way out in front. The associated, well-documented international law violations and negative impacts caused by companies involved in the settlements have been going on for far too long for financial institutions to feign ignorance”, said Steinar Krogstad, Deputy President of the Norwegian Confederation of Trade Unions on behalf of the DBIO coalition.
The DBIO 2022 report calls on financial institutions to conduct enhanced human rights due diligence in line with their responsibilities under international law and international standards on responsible business; take time-bound and effective action on the findings of impact assessments; exercise leverage on companies involved with the settlements; and, failing that, responsibly terminate financial relationships with companies that are unwilling to align with international law and human rights.
Download the full DBIO 2022 report here: dontbuyintooccupation.org.