A demonstrator waves a Palestinian flag inside a pro-Palestinian encampment at the University of Toronto campus in Toronto, on May 2.COLE BURSTON/Getty Images
Jonah Prousky is a management consultant and freelance writer who focuses on business, technology and society.
Last week, the University of Toronto’s administration met with the pro-Palestinian student protesters camping out on the lawn at King’s College Circle. In the meeting, the protesters restated their demands, namely that the school disclose and divest from any investment tied to Israel.
The students’ demands, however, were rebuffed by the administration. “Their response was a flat-out no,” one of the encampment organizers said.
A “flat-out no” is the right response for universities dealing with student encampments. That’s because their divestment demands would accomplish little and require university investment managers to hold companies that do business in Israel to a double standard.
For starters, most corporations have at least some connection to Israel’s high-tech economy. Even companies that don’t operate in the country likely invest, finance or transact with another company that does. So disentangling a university’s endowment from Israel – to the extent sought by the global Boycott, Divestment and Sanctions (BDS) movement – is unfeasible to begin with.
To be sure, many companies have direct ties to Israel and the war in Gaza. Lockheed Martin, for example, supplies the Israel Defence Forces with air and ground weapons and boasts of their partnership on its website. Hence, it’s an easy target for movements such as BDS.
McGill University owns $535,531 in Lockheed stock as of March 31. But that’s a negligible 0.03 per cent of the school’s $1.8-billion endowment and just 0.0005 per cent of Lockheed’s market cap. So even if McGill – and every other university in the world – were to acquiesce to the demands of pro-Palestinian students, the result would be business as usual for Lockheed Martin.
Students’ demands for divestment go well beyond military suppliers, however. McGill protesters’ list of “investments in genocide,” for example, includes about 50 companies, some of which merely have an office in Israel or invest in companies that do.
Take for example Royal Bank of Canada RY-T, which has almost no presence in Israel whatsoever. The bank is a target of BDS because it has a stake in a handful of companies, such as U.S. data and analytics firm Palantir, that serve Israeli customers. Or Unilever, which has been targeted for divestment because the company’s chief executive officer has publicly denounced the BDS movement. Canada’s Parliament, by the way, voted overwhelmingly to condemn BDS in 2016 as well.
If universities accept these grounds for divestment, every investment becomes problematic. Even owning an S&P 500 index fund, which happens to be the third-largest holding in McGill’s endowment, would violate the divestment logic that student protesters are pushing; the five most valuable companies in the S&P 500 have offices in Tel Aviv.
So it seems an awful lot like students are just throwing demands at the wall to see what sticks. A couple of weeks ago, for instance, I was watching a pro-Palestinian rally on my campus in London. A student wearing a stark expression and a keffiyeh gave me a flyer and said, “Don’t buy clementines, they usually come from Israel.”
In reality, most clementines in Britain come from Spain, Morocco, South Africa, Peru, Argentina and Chile. Sure, you see produce from Mehadrin – the largest exporter of citrus fruits in Israel – on the shelves in London supermarkets, but they are, anecdotally speaking, usually Shamoutis, which are much closer in taste and texture to Valencias than clementines.
So students’ calls for divestment are a little rough around the edges. Still, many argue that universities should divest – from something, anything – to take a moral or political stand, just as many institutions did in the 1980s to condemn South African apartheid. The problem is – leaving aside the fact that most schools have policies governing institutional neutrality – university administrators have to worry about the kind of precedent divestment in this context would set. There are, after all, countries with far worse human-rights records than Israel.
Hence, investment managers who take calls for divestment seriously would have to either apply a steep double standard to companies that do business in Israel or similarly divest from businesses linked to, say, the Palestinian territories, Iran and Qatar for their support of terrorist groups such as Hamas and Hezbollah.
Then there’s China and its treatment of Uyghur and Turkic Muslims, to say nothing of the ethnic conflicts involving Russia, Yemen, Azerbaijan and India. According to Canada’s Parliament, China’s actions constitute genocide under international law. Perhaps, then, students will organize to demand that their universities boycott and divest from China, too. But where to find a tent that wasn’t made in that country?