A U.S. company that provides information on investments has taken Caterpillar off three of its environmentally and socially responsible investment indexes, citing controversy over the Israeli military using its bulldozers in Palestinian territories as one of the reasons.
MSCI Inc. said Caterpillar was downgraded earlier this year because of several concerns, including a January labor dispute in Canada, environmental issues, employee safety and "an ongoing controversy associated with use of the company’s equipment in the occupied Palestinian territories."
The dropped environmental and social rating led Caterpillar to be removed from several of its investment lists.
Pro-Palestinian activists who have urged boycotts cheered the move. Since the downgrade, the TIAA-CREF financial services firm divested itself of $72 million in Caterpillar stock, dwarfing earlier divestments by smaller groups, according to the Jewish Telegraphic Agency.
TIAA-CREF told the agency that it had not been moved by activist pressure, but that the decision was tied directly to its "social screen vendor," MSCI.
Israeli and Jewish groups opposed to the boycott movement were dismayed by the decision, fearing it could affect an upcoming discussion by the Presbyterian Church over whether to divest from companies selling products to the Israeli military.
Caterpillar has been under added pressure since U.S. activist Rachel Corrie was run over and killed by an Israeli military bulldozer nine years ago. A lawsuit against the company over her death was dismissed.
The company says it does not sell directly to the Israeli military; the bulldozers are transferred by the U.S. government to Israel under a program that supplies scores of allied countries with equipment. The tractors are then outfitted with protective armor for military use. Caterpillar isn't involved in that process, it said.
"We hope and wish for a peaceful solution to the unrest in the Middle East, but that solution is a political matter to be worked out by the appropriate parties," Caterpillar spokesman Jim Dugan said in a statement. "Caterpillar does not and should not have a role in that political process."
-- Emily Alpert in Los Angeles