Following the recent International Court of Justice (ICJ) ruling on January 26, 2024, which found it plausible that Israel is violating the international legal prohibition on genocide, the University of Toronto and thus the University of Toronto Asset Management Corporation (UTAM), face urgent challenges to meet their commitments to responsible investing. The University of Toronto and UTAM’s commitment to Environmental, Social, and Governance (ESG) principles and the United Nations-supported Principles for Responsible Investment (PRI) underscores the obligations and responsibilities to divest from companies providing military goods or services to Israel. These products support the Israeli occupation of Palestinian territories, illegal settlements, and attacks on Gaza, thereby violating Palestinian human rights and perpetuating the apartheid regime. Commitments to ethical investment must be made material, and the gap between promise and practice must be erased.
In their 2023 Policy, UTAM defines responsible investing as “incorporating environmental, social and governance (ESG) factors into investment decisions and practising active ownership” and specifically identifies “activities in conflict zones” and “controversial weapons” as key ESG factors. By divesting from companies actively involved in conflict zones, weapons manufacturing, and other areas identified above, UTAM can align its financial holdings with its stated responsible investing goals and opposition to the oppression of Palestinians. Furthermore, divesting from military industries is essential to U of T’s current carbon neutrality goal. As NATO Secretary General Jens Stoltenberg noted at COP26 in 2021, “there is no way to reach net zero without also including emissions from the military” (John, 2021).
The concept of social injury is central to understanding the ethical implications of the University of Toronto’s investment practices. According to the University of Toronto’s Policy on Social and Political Issues With Respect to University Divestment, social injury is the injurious impact which the activities of a company are found to have on consumers, employees, or other persons, particularly including activities which violate, or frustrate the enforcement of rules of domestic or international law intended to protect individuals against deprivation or health, safety or basic freedoms. Numerous respected international authorities have concluded that the systematic violence the Israeli Defense Force (IDF) employs against Palestinians constitutes grave human rights abuses, flagrant violations of international law and war crimes. By investing in companies that provide arms, weapons, and military surveillance equipment and programs to the IDF, UofT is considered to be committing grave social injury.
Failure to address these investments risks making the University of Toronto and UTAM legally and ethically complicit in egregious activities that violate international law and moral obligation alike, including genocide. As a university, we must acknowledge that if we profit from these activities, we have a responsibility to direct UTAM to cease such investments and eliminate our complicity. UTAM is not simply a third-party arm-length entity but a tool we designed for investment, and we have a moral obligation to ensure its ethical use. Responsible investing means taking action when there is a significant likelihood of catastrophic activities rather than waiting for definitive proof. Consequently, UTAM must understand which companies it has financial relations with and the extent and consequences of their business practices. Profiting from such activities poses a severe reputational risk to the institution, and prudent risk management is essential for responsible investment practices. UTAM may inadvertently contribute to human rights violations without this knowledge and undermine its academic and professional reputation. (more...)
Disclose. Divest. The University of Toronto's Investments in Israeli Apartheid
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