July 21, 2006 – Activists pushing investors to drop shares of Coca Cola stock scored a victory Tuesday when a segment of the nationâ€™s largest pension fund divested from the beverage giant.
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Activists had been putting pressure on the educatorsâ€™ retirement fund TIAA-CREF to drop Coke stock from its Choice Account, a fund set up to cater to socially conscious investors. Groups like Stop Killer Coke and the Campaign for a Commercial Free Childhood had hoped to send a message to Coca Cola over the beverage companyâ€™s marketing to children and its alleged human-rights and environmental abuses abroad.
Workers for Coca Cola Colombia say the company has teamed up with paramilitaries there in an attempt to stem union power through kidnappings, tortured and even murder of labor organizers there. Coke has denied the allegations.
In India, communities near Coke plants have seen their water dry up as the company pumps millions of gallons to make its beverages. The communities have also suffered the destruction of their farmland from lack of water and pollution from the bottling plants.
According to Reuters, TIAA-CREFâ€™s Social Choice Account held about 1.2 million shares of Coke stock as of March 31, the last period for which numbers were released â€“ then valued at $52.4 million.
The decision by TIAA-CREF to finally sell off its shares came after KLD Research & Analytic announced it was dropping Coke from its Broad Market Social Index, which TIAA-CREF uses to determine companiesâ€™ eligibility for its Choice Account.
KLD says it screens companies for its Broad Market Social Index and weeds out companies involved in alcohol, tobacco, firearms, gambling, nuclear power and military weapons. The firm evaluates remaining companies, it says, on their involvement in the community, their corporate governance, diversity, employee relations, environment, product quality, and safety and human rights.
But the firm does not necessarily exclude companies with mixed records, instead relying on comparisons to corporationsâ€™ industry peers.
"KLD strives to include companies with social records that, on balance, are acceptable to social investors," states the firm on its website.
As a result of its screening process that allows default inclusion in the index unless companies are particularly egregious as compared to their peers, many of the indexâ€™s favored holdings have what watchdog groups consider poor records in human rights, environmental impact, and general corporate responsibility.
Included in the listâ€™s top ten holdings are firms such as Procter & Gamble, loathed by animal rights activists for testing cosmetics and other products on animals; AT&T, implicated in assisting the US National Security Agency collect customersâ€™ telephone and e-mail records in a massive warrentless dragnet; and Wells Fargo, targeted by activists over its alleged predatory-lending practices in low-income communities.