French Insurance Firm Succumbs to Years-Long Pressure to Divest From Israeli Banks

The move comes after years of pressure

Climate and human rights activists protest outside the offices of AXA UK on February 29, 2024 in London, United Kingdom. Photo by Mark Kerrison/In Pictures via Getty Images.

A major player in the French insurance industry has divested its holdings in three banks known to support the illegal occupation of the West Bank, delivering a major win to the global campaign to boycott Israeli institutions involved in human rights abuses against Palestinians.

AXA, the multi-billionaire dollar insurance company, had been the target of a years-long effort led by Ekō, an international ethical-investing advocacy organization, pressuring it to unwind its holdings in the companies. In August, Ekō published an analysis showing AXA had unwound its previous holdings in Bank Hapoalim, Bank Leumi, and Israel Discount Bank. AXA has also not reinvested in previously held positions in Bank Mizrahi-Tefahot or First International Bank of Israel, two additional targets of the campaign.

The banks were listed in a United Nations database of companies deemed complicit in maintaining the illegal occupation of the West Bank. “Foreign businesses that invest in these banks are complicit in Israeli war crimes,” said Leili Kashani, a senior campaigner at Ekō.

Until September of last year, AXA held 2.5 million shares in the three designated banks, worth around $20.4 million. But by June of this year, the company had effectively zeroed out its holdings, Ekō found. AXA’s portfolio still includes a residual position of 16,290 shares of Bank Leumi stock. Profundo, an independent research organization which contributed to the report, attributed that holding to “reporting and internal accounting delays” and deemed the sell-offs a “full divestment.”

While the company has not directly attributed its divestment to the activist campaign, at an AXA shareholder meeting in April CEO Thomas Buberl appeared to distance himself from the company’s past investments in Israel. “AXA has no investments in Israeli banks. We have no shares in the banks targeted by the calls for boycott that certain activist groups are currently leading against several companies,” he said.

AXA did not respond to a request for comment from Drop Site News.

The speed and scale of the drawdown, as well as the financial position of the assets sold off, suggested AXA’s divestment was motivated based on Environmental, Social, and Governance (ESG)-related criteria rather than financial considerations, according to Profundo.

Noam Perry, the strategic research coordinator at the American Friends Service Committee Action Center for Corporate Accountability, a participant in the campaign, said that persuading a large company like AXA to divest is rare. “This is not an institution that inherently has a commitment to make the world a better place,” he said.

The successful campaign focused on AXA comes in the wake of a larger effort to push corporations to divest from companies complicit in the occupation, as well as human rights abuses in Gaza. Last year, it was revealed that Scotiabank, one of Canada’s largest financial institutions, was the single largest foreign shareholder in Elbit Systems, the Israeli arms manufacturer whose weapons have widely been employed in the West Bank and Gaza.

The company’s $500 million position in Elbit, also targeted by a previous campaign led by Ekō, was managed by the firm’s asset management arm, and, in particular, a subset of investment funds run by a single asset manager at the company.

Following outcry over the report showing Scotiabank’s massive stake in Elbit, the company was hit by protests and shareholder activist campaigns pressuring it to divest from the Israeli arms manufacturer. The backlash seems to have had an effect: Earlier this year, Scotiabank halved its position in Elbit, according to regulatory filings.

Extracting a Cost

Amid the outrage over the war in Gaza, sovereign wealth funds, pension funds, unions, and universities, as well as municipalities both in the U.S. and around the world, have made further commitments to disinvestment, or entertained calls to review their investments in Israel over the past year.

The economic impact of the accelerating boycott campaign targeting Israel is difficult to quantify in isolation. But it is one factor that has contributed to a significant economic downturn in Israel over the past year.

In the last quarter of 2023 the Israeli economy contracted roughly 20% in annualized terms, as the government dealt with the economic strain of hundreds of thousands of reservists leaving the workforce, as well as many Israelis evacuating the north of the country near Lebanon. In August, credit ratings agency Fitch downgraded Israel’s sovereign credit rating to an A, while maintaining a negative outlook that signaled the possibility of further downgrades should the war continue. Israel is now on pace for the worst performance of any country in the Organization for Economic Co-operation and Development.

Even the perception that Israel is being targeted over its conduct has led to a backlash.

International investors and ratings agencies such as Morningstar and MSCI have received pushback from right-wing media for giving ESG-related warnings against a number of companies doing business in Israel. Dozens of state attorneys general have launched probes into companies accused of engaging in BDS, building off anti-BDS legislation that has been passed in much of the country.

Recently, Democratic Rep. Ritchie Torres accused airlines that have canceled flights to Israel due to security concerns amid the current conflict of “discrimination.” He has called for them to be banned from “effectively boycotting” the country by forcing them to fly through conditions they have deemed too dangerous.

The pushback has not deterred boycott activists, who see recent events like AXA’s divestment as a sign that time is on their side.

Ekō is now targeting major global financial organizations like BNP Paribas, Deutsche Bank, Crédit Agricole, and Barclays with similar boycott measures over their lending to Israeli arms suppliers. It has also trained its focus on finance giant Citigroup, which recently helped finance the purchase of F-35 jets by the Israeli military.

As these activists have said, their goal is to raise the economic risk of investing in Israel under present conditions to a level where the corporate world is forced to take notice.

“Investing in apartheid Israel has always been unethical and illegal,” said Fiona Ben Chekroun, Europe coordinator for the Palestinian BDS National Committee. “With Israel’s economy in steady decline, it’s now also really reckless.”