Targeted Divestment Center

For our members who want more ready information on targeted divestment to assist in moving investments from funds that support genocide to funds that perform equally well or better, this is a one-stop location for information on the targeted divestment movement for Darfur.

A list of resources is available at the bottom of the page.

A Basic Overview

Targeted divestment - and the "targeted" portion is important - is a financial movement designed to meet two key goals. The first goal is to stop putting money into foreign investments that contribute to Sudan's ability to make war on its own citizens. The second goal is a simple fiduciary one - to remove funds from investments made volatile because they support an unstable regime engaging in genocide.

It's a simple fact that investments are affected by the state of the economy in the nations where the investment lies. In the case of Sudan, the government there has been engaged with the Janjaweed, opposing forces from Ethiopia and Chad and has been called out as a perpetrator of genocide. These factors give investments tied to Sudan an unstable stock price and a potential to lose an entire investment if war breaks out, if a regime change happens, etc.

What we propose is targeted divestment. The Sudan Divestment Task Force has identified about two dozen companies in Europe and Asia that invest heavily in Sudan. These are NOT AMERICAN FIRMS. This is a key point. We are not seeking to take money away from U.S. companies. Targeted divestment takes money right out of the hands of the Sudanese government.

Who should divest?

Anyone and everyone. If you have investments in a retirement plan, pension plan or contribute to an annuity managed by a major fundholder that makes foreign investments, you should consider calling your investment team and asking about the companies in our program.

Dealing with opposition to targeted divestment

Featured here are responses from Allyson Neville, one of our contacts at the Genocide Intervention Network. GI-NET houses the Sudan Divestment Task Force, so the two are intimately linked.

"While we feel our model legislation is constitutional, in-line with federal measures, and responsible from a fiduciary standpoint, there is some debate surrounding a state's right to pursue divestment legislation. 

There are a few reasons for this debate:
 
The Illinois law that was struck down is one reason.  Although, the law was struck down for reasons other than their blanket divestment approach (which targeted American companies exempt from federal sanctions), there is the perception that the bill was declared unconstitutional because of their divestment approach.  As you know, however, the SDTF model pursues a targeted approach.
 
The Administration is claiming that state divestment interferes with the President's ability to make foreign policy and is therefore unconstitutional.  While the President does have the ability to make foreign policy, Congress has the authority to legislate foreign commerce under which divestment would apply.  Congressional authorization for state divestment would issue a clear go ahead for states to pursue divestment with the blessing of the federal government.  That being said, from a fiduciary standpoint, divestment is not as much about targeting a genocidal regime as much as it is about minimizing financial risks associated with investing in companies supporting a genocidal regime.
 
Information Dealing With Current Federal Legislation

NOTE: The U.S. House passed HR 180 with only a single dissenting vote. The legislation before the Senate, the Sudan Accountability and Divestment Act [SADA] is a senate-originated bill that performs the same function.

 

The legislation (S.2271) before the Senate “simply ensures that States and municipal entities move forward with divestment in a unified and targeted fashion that is consistent with and complimentary to Federal foreign policy. This includes the same carve-outs and protections for South Sudan, as well as exemptions for companies authorized by OFAC to operate in Sudan. And perhaps most importantly, [SADA] ensures that divestment policies for State and local entities all expire under the same conditions, benchmarked to Federal actions and statements.” (Quote from a statement before the Banking Committee by Adam Sterling, Director of the Sudan Divestment Taskforce--a project of Genocide Intervention Network.)  At this point, over 21 states have implemented Sudan divestment policies.  S.2271 will insure that these states, and additional states looking to follow their lead (including Georgia), will do so in a manner that is financially responsible and consistent with federal policy toward Sudan.

 

We have taken very careful consideration in developing our state model to ensure that there will be no unintended consequences to the beneficiaries of the pension plans. In fact, there exists an opt-out clause in our legislative model, which allows states to reinvest if the state pension fund loses more than one half of one percent of total assets as a result of implementing the legislation.  Judging from cost estimates produced by states currently implementing targeted Sudan divestment legislation, the amount of money states realistically stand to lose from this policy is nowhere near 0.5% of total assets, if anything at all.  In fact, in most of the states that have implemented or are considering targeted Sudan divestment, less than 0.3% of the total assets of state funds even need to be moved into equivalent Sudan-free options.

 

From a fiduciary standpoint targeted divestment deals with an incredibly small set of companies (approximately two dozen) with financially equivalent substitutes. In other words, it is easy for states to find equivalent investment opportunities.  Furthermore, companies conducting business operations with a genocidal regime face significant reputational risks, which directly impact their financial success.  Our research shows that many of the companies currently targeted for divestment significantly underperformed their peers in the past (over a 3 and 5 year comparison).

 

From our perspective, divestment is an option that should be considered only in the most extreme of circumstances. Heeding every call for divestment is both impractical and imprudent. However, the overwhelmingly heinous nature of genocide – a determination validated by official, non-biased, and highly trustworthy sources, including the President of the United States and the United States Congress – combined with the Sudanese government's historical responsiveness to economic pressure makes the call for Sudan divestment truly singular among recent divestment campaigns.

Additional Resources:

Divestment Constitutionality | One-Page Fact Sheet | Task Force Model | Sudan Divestment Task Force Reports |