Some politicians have greeted the moves by members of this coalition -- which includes the U.S.'s largest public pension fund, California Public Employees' Retirement System -- with skepticism. California State Assemblyman Joel Anderson, author of an Iran divestment bill that passed the state Assembly and now goes to the Senate, says pension funds that have lobbied hard against these divestment bills can't be trusted to follow through with divestment.
Basically, if the pension funds can demonstrate they are doing "something", they can ease the pressure on them to disinvest.
A couple of thoughts. First, I'm not a fan of divestment except in unique circumstances (ie a cancer charity wanting to avoid tobacco stocks). I don't think it does any good, as the shares just get bought be someone else who doesn't share your concerns. I doubt it will be long before we start seeing major Chinese investors in the market. Do you think they are going to share the same view as US divestment campaigners?
Second, the divestment campaign gives you an idea of what democratised capital markets might end up looking like. To date investor activism has tended to come from the Left (although free enterprise and 'vice' funds exist in the US market). The Iran divestment campaign, and the SEC's recent intervention (see below) in respect of companies doing business with 'rogue' states, show that initiatives may also come from the Right. We might not agree with it, but if 'democratic capitalism' is going to mean anything we have to acknowledge the right of those with other views to organise their capital too.
SEC 'terror' list pulled
In June, the Securities and Exchange Commission in the US had unveiled an online list of companies with links to Cuba, Sudan, North Korea, and Syria. thislist was clearly aimed at investors. However the list has been unceremoniously pulled after less than a month (see SEC statement), although it may return in a revamped form. The SEC had come in for flak from some who argued it was taking an unprecedented step into social policy.