8.1 Aim: a comprehensive policy

Divestment is intended to create an incentive for companies to stop producing nuclear weapons by cutting off their access to financing. The most effective way of doing this is for financial institutions to adopt comprehensive policies that prohibit any financial involvement with all nuclear weapons producers.

Comprehensiveness is key. Why? Banks may make money available to a company on the condition that it is not used for nuclear weapons activities, but “[t]here is no way to prevent a company from reallocating money once it’s been invested”. Therefore, “[t]he only way to make sure the investments do not facilitate the production of nuclear weapons or key components of nuclear weapons is to exclude the company as a whole”.

If a bank has a policy which only prohibits the financing of specific nuclear weapons projects, or if the policy only covers some of the bank’s activities, nuclear weapons producers will still be able to access financing. This will not create enough of an incentive for them to stop producing nuclear weapons.

The DBOTB report defines a comprehensive policy as one that meets the following criteria:

1. Excludes all nuclear weapon associated companies

The policy excludes:

  • whole companies, not only nuclear weapons related projects
  • companies associated with nuclear weapons, including through joint ventures
  • companies regardless of their country of origin
  • companies regardless their country of operation

2. Excludes all nuclear weapon associated activities

The policy excludes companies associated with:

  • development, testing, production, maintenance or trade of nuclear weapons related technology, parts, products or services.
  • delivery systems such as missiles, that are specifically developed for nuclear tasks. It does not include delivery platforms such as bombers and submarines.

3. Apply to all the institution’s products and servicescommercial banking, investment banking and asset management.

The institution applies the policy:

  • for the entire group, including subsidiaries
  • in all markets
  • to all asset management classes – passive and active, internal and external
  • to all existing and future investments.

Source: Maaike Beenes and Susi Snyder, “Don’t Bank on the Bomb: A Global Report on the Financing of Nuclear Weapons Producers”, PAX (March 2018).

There are 22 examples of comprehensive policies in the DBOTB report’s Hall of Fame. The Runners-up category includes information about another 41 financial institutions which have policies that partially restrict nuclear weapons financing. Each financial institution in the Runners-up category is rated for its policy comprehensiveness, with one star awarded for meeting each of the three criteria above and another star awarded if the institution is found to have no investments in nuclear weapons producers.