Scotiabank cuts stake in Israeli defence firm Elbit as war with Hamas drags on

financialpost.com:

Bank of Nova Scotia’s asset-management arm reduced its stake in Israeli defence contractor Elbit Systems Ltd., an investment that sparked protests last year as the war between Israel and Hamas raged on.

Scotiabank’s 1832 Asset Management trimmed its holdings in Elbit to 4.3 per cent in the fourth quarter, according to filings with the United States Securities and Exchange Commission. That was down from 5.1 per cent in the third quarter, though the fund manager remains the largest non-Israeli shareholder, according to data compiled by Bloomberg.

Scotiabank spokesperson Heather Armstrong declined to give an explanation for the share sale, saying it doesn’t comment on changes to individual securities in its mutual funds and that holdings may fluctuate over time.

In November, amid a worsening humanitarian crisis in Gaza, protesters briefly occupied the bank’s headquarters in downtown Toronto. But the investment was controversial even before the war because Elbit had been accused of manufacturing cluster munitions, which can kill or maim civilians during a conflict or long after it has ended.

Eko, an advocacy group formerly known as SumOfUs, launched a petition in 2022 calling on Scotiabank to divest. Elbit has denied producing cluster bombs and the Canadian bank backed that position when the petition was launched.

The bank told Bloomberg at the time that its asset management arm “does not knowingly invest in companies that directly manufacture cluster munitions” and said it had confirmed with a third-party investment research firm that Elbit doesn’t do so.

“Scotiabank’s quiet divestment still falls short,” Angus Wong, senior campaign manager at Eko, said via email. “They must demonstrate genuine commitment by fully divesting