Some European Firms Retreat from Israel-Linked Finance amid War Pressure

 An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)
An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)
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Some European Firms Retreat from Israel-Linked Finance amid War Pressure

 An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)
An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)

Several of Europe's biggest financial firms have cut back their links to Israeli companies or those with ties to the country, a Reuters analysis of filings shows, as pressure mounts from activists and governments to end the war in Gaza.

While banks and insurers are often vocal about their environmental and governance aims, they are less forthcoming about disclosing their potential exposure to war.

UniCredit put Israel on a "forbidden" list as the conflict escalated in October last year, said a source familiar with the matter, confirming a study by Dutch NGO PAX.

While in line with the Italian bank's defense-sector policy of not directly financing arms exports to any country involved in conflict, it goes beyond Italy's guidelines on arms exports to Israel.

UniCredit declined to comment on its move and the Israeli finance ministry also declined to comment.

Meanwhile, Norwegian asset manager Storebrand and French insurer AXA have sold shares of some Israeli firms, including banks.

Although corporate filings offer only a glimpse into such exposures, they show companies have been readjusting.

"We don't know whether this represents the beginning of a shift in the industry, one that recognizes the power banks have in choosing where to allocate capital, and where not," said Martin Rohner, executive director at the Global Alliance for Banking on Values, which focuses on sustainable financing.

"Investing in the production and trade of weapons is fundamentally opposed to the principles of sustainable development," Rohner added.

Israeli Finance Minister Bezalel Smotrich told a press briefing last week that although there are challenges to Israel's economy, firms are still raising money. "I sit with foreign investors and they believe in our economy," he said.

Reuters has reported that Israel's investor base has narrowed since it entered Gaza last year in response to attacks by Hamas, and it is feeling the effects of rising borrowing costs.

The potential wider effects can be seen in the approach taken by Storebrand, which a filing showed divested a holding worth about $24 million in Palantir, citing the risk of violations of international humanitarian law and human rights.

US group Palantir, which provides technology to Israel's military, did not respond to a request for comment.

Storebrand's annual investment review said that, as of the end of 2023, it had excluded 24 firms, including Israeli companies, across its portfolios in relation to the occupation of Palestinian territories.

The International Court of Justice, the United Nations' highest court, ruled in January of plausible risk of irreparable harm to Palestinian rights to be protected from genocide.

The same court said in July that Israel's occupation of Palestinian territories including the settlements is illegal.

Israel has rejected the rulings, which combined with growing pressure from activists and governments, are nevertheless having an impact on investment decisions.

AXA, one of Europe's largest insurers, British bank Barclays and German insurer Allianz have increasingly been targeted by campaigners.

"Increasing demand for greater transparency and scrutiny can only mean that financial institutions will intensify and broaden their self-assessment of their commercial associations with arms-related businesses or states," said David Kinley, professor and chair of human rights law at the Sydney law school.

The Ireland Strategic Investment Fund (ISIF) has exited six Israeli companies, selling holdings which amounted to about 3 million euros ($3.26 million), including some of Israel's largest banks, a spokesperson told Reuters.

Earlier this year, the 15-billion-euro Irish fund said that the risk profile of such investments were no longer within its investment parameters.

And Norway's $1.8 trillion wealth fund, the world's biggest, may divest shares of companies that aid Israel's operations in the occupied Palestinian territories which violate its ethics standards for businesses.

WAR EXPOSURE

Investments in Israeli banks are also under scrutiny.

The UN included them in 2020 in a list of companies with ties to settlements in the occupied Palestinian territories as part of its mission to review the implications on Palestinian rights.

A study by research firm Profundo, commissioned by corporate watchdog Ekō, shows that AXA sold almost all of its holdings in Israeli banks stocks earlier this year, retaining only a marginal stake in Bank Leumi.

Reuters verified the data with LSEG. A representative for Bank Leumi did not respond to a request for comment.

A spokesperson for AXA declined to comment on whether AXA had cut its holdings, adding that it is not invested in the banks targeted by activists. The UN list is among the criteria AXA takes into account for investment decisions, they added.

'A CLEAR LINE'

Foreign direct investment into Israel fell by 29% in 2023 to its lowest since 2016, UN Trade and Development data shows.

While UNCTAD 2024 figures are not available, credit ratings agencies have flagged the war's unpredictable impact on investment in Israel as a concern.

Although the US remains Israel's biggest military and financial backer, Spain, Ireland and Norway have recognized a Palestinian state, French President Emmanuel Macron has called for an arms export halt and Britain has suspended some licenses.

When it comes to international politics, "it should be down to the governments to take a clear line," said Richard Portes, professor of economics at London Business School, adding: "To put the burden on the private firms, where does this end?"

In an example of how activists are targeting companies directly, Barclays came under pressure from a campaign in Britain, prompting it to withdraw sponsorship from summer music festivals, while the Financial Times reported in August that it considered pulling out of an Israeli government bond sale.

Barclays said in a statement that it remained "fully committed" to its role as a primary dealer and that such activities fluctuated each quarter. The bank fell out of the top five dealers of Israeli bonds in the second and third quarters, after ranking third in 2023.



The US Election by Numbers

Clark County Election Workers inspect mail-in ballots for the 2024 Election at the Clark County Election Department in North Las Vegas, Nevada, USA, 02 November 2024. (EPA)
Clark County Election Workers inspect mail-in ballots for the 2024 Election at the Clark County Election Department in North Las Vegas, Nevada, USA, 02 November 2024. (EPA)
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The US Election by Numbers

Clark County Election Workers inspect mail-in ballots for the 2024 Election at the Clark County Election Department in North Las Vegas, Nevada, USA, 02 November 2024. (EPA)
Clark County Election Workers inspect mail-in ballots for the 2024 Election at the Clark County Election Department in North Las Vegas, Nevada, USA, 02 November 2024. (EPA)

Swing states, electoral college votes, candidates up and down the ballot, and millions of potential voters: Here is the US election, broken down by numbers.

- Two -

Several independents ran -- and at least one, Robert F. Kennedy Jr, stumbled into a number of eyebrow-raising headlines.

But in the end, the presidential race comes down to a binary choice, with the two candidates from the major parties -- Democrat Kamala Harris and Republican Donald Trump -- seeking to lead a polarized America.

- Five -

November 5 -- Election Day, traditionally held on the Tuesday following the first Monday in November.

- Seven -

The number of swing states -- those which don't clearly favor one party over the other, meaning they are up for grabs.

Harris and Trump are courting voters in Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin, concentrating their campaign efforts there in a push to ensure victory.

In a razor-tight election, just a handful of votes in any of those states could decide the outcome.

- 34 and 435 -

Voters won't just decide the White House occupant on Election Day -- they will also hit refresh on the US Congress.

Thirty-four Senate seats and all 435 spots in the House of Representatives are up for grabs.

In the House, members serve a two-year term. Republicans currently have the majority, and Harris's Democrats will be hoping for a turnaround.

In the Senate, 34 seats out of 100 are available, for a six-year term. Republicans are hoping to overturn the narrow Democratic majority.

- 538 -

Welcome to the Electoral College, the indirect system of universal suffrage that governs presidential elections in the United States.

Each state has a different number of electors -- calculated by adding the number of their elected representatives in the House, which varies according to population, to the number of senators (two per state).

Rural Vermont, for example, has just three electoral votes. Giant California, meanwhile, has 54.

There are 538 electors in total scattered across the 50 states and the District of Columbia. To take the White House, a candidate must win 270 votes.

- 774,000 -

The number of poll workers who made sure the 2020 election ran smoothly, according to the Pew Research Center.

There are three types of election staff in the United States.

The majority are poll workers -- recruited to do things like greet voters, help with languages, set up voting equipment, and verify voter IDs and registrations.

Election officials are elected, hired or appointed to carry out more specialized duties such as training poll workers, according to Pew.

Poll watchers are usually appointed by political parties to observe the ballot count -- expected to be particularly contentious this year, thanks to Trump's refusal to agree to unconditionally accept the result.

Many election workers have already spoken to AFP about the pressure and threats they are receiving ahead of the November 5 vote.

- 75 million -

As of November 2, more than 75 million Americans had voted early, according to a University of Florida database.

Most US states permit in-person voting or mail-in voting to allow people to deal with scheduling conflicts or an inability to cast their ballots on election day itself on November 5.

- 244 million -

The number of Americans who will be eligible to vote in 2024, according to the Bipartisan Policy Center.

How many of those will actually cast their ballot remains to be seen, of course. But the Pew Research Center says that the midterm elections of 2018 and 2022, and the presidential vote of 2020, produced three of the highest turnouts of their kind seen in the United States in decades.

"About two-thirds (66 percent) of the voting-eligible population turned out for the 2020 presidential election -- the highest rate for any national election since 1900," Pew says on its website.

That translated to nearly 155 million voters, according to the Census Bureau.