Bank of Nova Scotia BNS-T subsidiary 1832 Asset Management cut its holdings of Israeli weapons manufacturer Elbit Systems Ltd. by more than $100-million last quarter, bringing its ownership stake to nearly a fifth of where it stood a year ago.
Elbit is Israel’s biggest publicly traded arms company, producing military drones, artillery ammunition and other material. It has said in financial reports that it has “experienced a material increased demand” for its wares since the start of the Israel-Hamas war in Gaza. The Palestinian Ministry of Health says the war has killed more than 39,000 people in the territory; it does not distinguish between combatants and civilians.
The asset manager has not indicated any reason for divesting from Elbit, which it disclosed in a securities filing late Tuesday.
Artists have spent nine months protesting the affiliation of Scotiabank-sponsored events and awards with the arms manufacturer. That includes the Contact Photography Festival, which saw nearly 10 per cent of exhibitors exit over Elbit this year; the Scotiabank Giller Prize, which dozens of eligible authors have boycotted this year; and the Hot Docs Film Festival.
Much of the Elbit pushback has originated from groups protesting organizations connected with specific artistic disciplines, each as part of a broad umbrella campaign called No Arms in the Arts.
“The prevailing view is that these investments in Palestinian death must end, and artists and culture workers are among the many working to make Scotiabank’s stake untenable,” Michael DeForge, a spokesperson for the campaign, said in an e-mail Wednesday. “We’re not settling for partial divestment, or keeping our sights on Scotiabank alone – we will continue to target any organization enabling Israel’s atrocities.”
At the end of 2022, U.S. Securities and Exchange Commission filings show, 1832 owned 5.06 per cent of Elbit, making it the Israeli firm’s biggest foreign shareholder and one of its biggest shareholders overall.
But starting last fall, the filings show, 1832 gradually began to divest its stake in Elbit: to 4.2 per cent at the end of 2023 and 2.5 per cent at the end of March. In the most recent quarter, ended June 30, 1832 shed even more Elbit shares and now owns 1.4 per cent of the company, a stake worth US$113-million.
In an e-mail, Maria Saros, Scotiabank’s senior vice-president of global business lines communications, said “individual securities are held based on their investment merit and are not influenced by protest activity.”
“Holdings in individual securities will fluctuate over time as portfolio managers seek out opportunities to deliver strong risk-adjusted returns,” she added. “Scotiabank cannot interfere in the independent investment decisions of its portfolio managers, who are fiduciaries that are duty-bound to make decisions in good faith in the best interest of the funds they manage.”