By Jaya Ramachandran
GENEVA (IDN) — “The nuclear weapons narrative is changing. The implicit permission to make weapons of mass destruction is getting revoked by governments, parliamentarians, cities and the financial sector,” says a new report, released ahead of Russia’s invasion of Ukraine, which marks a turning point in post-Cold War history. Significantly, the Russian invasion has also triggered the fear of a third world war, which would involve nuclear weapons. [2022-03-14-32] JAPANESE | MALAY | NORWEGIAN | TURKISH
The report ‘Rejecting Risk: 101 policies against nuclear weapons’, has been published by the Geneva-based International Campaign to Abolish Nuclear Weapons, that was awarded the 2017 Nobel Peace Prize, and PAX, the largest peace organization in Utrecht, the Netherlands.
It profiles 101 financial institutions with policies that restrict investments in the companies involved in the manufacture, development, deployment, stockpiling, testing or use of nuclear weapons. This, noes the report, is an increase of 24 compared to the previously published research. Of these, 59 institutions have comprehensive policies in place. They are listed in the ‘Hall of Fame’. 42 institutions have a policy that is not all-inclusive. These are listed in the ‘Runners-Up’.
The Hall of Fame profiles 59 financial institutions that have adopted, implemented and published a policy that comprehensively prevents any financial involvement in nuclear weapon producing companies. The institutions in the Hall of Fame are based in Australia, Belgium, Canada, Denmark, Finland, Germany, Ireland, Italy, Luxembourg, Mexico, New Zealand, Norway, Sweden, Switzerland, the Netherlands, United Kingdom and the United States.
The ‘Runners-Up’ section highlights 42 financial institutions that have taken the step to exclude nuclear weapon producers from their investments, but whose policy is not all-inclusive in preventing all types of financial involvement with nuclear weapon companies. These are are based in Aotearoa/ New Zealand, Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy, Malaysia, Norway, Spain, Sweden, Switzerland, the Netherlands, the United Kingdom and the United States.
According to the report, the growing number of financial institutions not investing in nuclear weapon companies are citing the Treaty on the Prohibition of Nuclear Weapons (TPNW) as part of the justification for these exclusions in their policies. “There is a correlation between the growing understanding of the private sector’s involvement in nuclear weapons programmes, and the number of policies excluding the companies involved,” notes the report.
There were 54 policies included in the 2016 ‘Don’t Bank on the Bomb’ report before the TPNW was negotiated. After the treaty was adopted, the number rose to 77. Since the TPNW went into effect, the number of known polices has increased to over 100.
The Treaty was adopted by the Conference—by a vote of 122 States in favour, with one vote against and one abstention—at the United Nations on July 7, 2017, and opened for signature by the UN Secretary-General on September 20, 2017. Following the deposit with the Secretary-General of the 50th instrument of ratification or accession of the Treaty on October 24, 2020, it entered into force on January 22, 2021 in accordance with its article 15 (1).
The report accentuates that the growing numbers of financial institutions listed provides a snapshot of the emerging norm within the financial sector to avoid companies contributing to existential risks. “In addition to the increase in identified policies, the application of these policies is becoming more comprehensive, illustrating financial institutional recognition of their role in not condoning the production of inhumane weapons.”
The TPNW seems to be having a powerful impact, and the report illustrates just one of the ways it is doing so. Financial institutions representing $3.9 trillion ($3,964,016,300,000) specifically named the Treaty as a reason to exclude the nuclear weapon industry from investment or financing. This represents about a quarter of all the assets held by the financial institutions in the Hall of Fame, a tremendous $14 trillion that is kept away from the companies involved in nuclear weapons.
“Nuclear weapons are illegal under international law, and investors are seeing the companies behind the bomb for what they really are: a risky business,” said report author Susi Snyder. “This change in the legal landscape is already changing the financial industry.”
If a company is doing something that presents a sustainability, governance, human rights related or other problem, financial institutions have a choice whether they want to continue financing problematic actors or not.
These problem companies need to generate capital to continue their activities, and the voice of investors can sometimes change problematic behaviour. But, not always, and that’s when financial ties are severed and problem companies are blacklisted. About half of the financial institutions in ‘Rejecting Risk’ report publish a blacklist.
The identification of policies for inclusion in this report is based on peer recommendations. “With a significant percentage of new wealth seeking investment in funds with strong environmental, social and governance criteria, along with the Entry into Force of the Treaty on the Prohibition of Nuclear Weapons, it can be estimated that the number of policies excluding nuclear weapon producers will continue to grow,” says the report.
It continues: The financial sector always dances with risk, for without a bit of risk there’s very little reward. Yet, more than 100 institutions are publicly stating the nuclear weapons business is too risky and not worth any reward. [IDN-InDepthNews – 21 March 2022]
Photo: Cover of the Report