by Linda Pearson, 19 January 2022
On 22 January 2021 the landmark United Nations Treaty on the Prohibition of Nuclear Weapons entered into force. This Saturday, peace activists around the world will mark the first anniversary of the day that a comprehensive ban on nuclear weapons finally became part of international law.
There has been much to celebrate in the last 12 months regarding the treaty’s progress. Another five states have joined the treaty and the first NATO non-state party, Norway, has committed to attending the First Meeting of States Parties of the treaty as an observer – a very significant development.
An area where the treaty’s impact is being felt strongly is in the financial sector. A new PAX-ICAN report published today shows how the strengthened global norm against nuclear weapons is causing banks and fund managers to rethink their investment policies with regards to nuclear weapons producers.
The report, Rejecting Risk: 101 policies against nuclear weapons, explains how the risks around investing in nuclear weapons producers have grown as a result of the treaty. Many nuclear weapons producers have operations in several countries. When one of those countries joins the treaty, the company will not be able to conduct any nuclear weapons related activities within the country without facing penalties. As the report says, ‘this is an increasingly material risk for these companies’ and a reputational and financial risk for their investors.
It’s not surprising, therefore, that since 2016 (the year before the treaty was adopted by the UN), the number of financial institutions with policies that restrict investment in nuclear weapons producers has gone up from 54 to 101.
The report also explains how the broader move within the financial sector towards sustainable finance is impacting the nuclear weapons business and the arms industry as a whole. The increasing application of ESG (environmental, social and governance) criteria in investment decision-making is leading more and more banks and fund managers to turn away from the arms industry altogether, putting arms company executives on the defensive.
Investment policies – the great and the not-so-great
The majority of the financial institutions profiled in the Rejecting Risk report (59) have a policy that comprehensively excludes nuclear weapons producers from investment. These organisations feature in the ‘Hall of Fame’ while the remaining 42 institutions that have policies that only partially restrict investment in nuclear weapons producers feature on the ‘Runners-Up’ list.
While the picture is very positive at the international level, only one UK-based financial institution is listed in the Hall of fame: the Co-operative Bank. Four others have made it onto the Runners-Up list – Aviva, Barclays, Standard Chartered and NatWest Group – as they each have a policy that fall short of a comprehensive exclusion.
It’s time for this to change. Nuclear weapons present a grave threat to our security and our survival. As long as our money is used to finance nuclear weapons producers, this threat will remain.
Divestment is a powerful tool that we can use to advance the goal of a nuclear-weapons-free world. If we can persuade more financial institutions to divest from the nuclear weapons business, this will in turn pressure the companies involved to cease nuclear weapons work (as happened recently with Serco).
Don’t Bank on the Bomb Scotland has been working with PAX and ICAN to persuade Scotland’s largest bank, NatWest Group to change its investment policy. In 2021 we sent a letter to the group’s CEO, Alison Rose, urging the bank to change its investment policy that was co-signed by 42 civil society organisations.
We have also created a model resolution targeting local authority pension funds that can be sent to local councillors. Five Scottish councils have already passed the resolution.
Here’s how you can help:
- Contact NatWest Group and other UK financial institutions about their investment polices using the simple template emails at https://investinginchange.uk/action/
- Contact your local councillors to request that they support a resolution calling on their pension fund to divest from nuclear weapons: https://nukedivestmentscotland.org/local-authority-divestment-resolutions/
- Share these links on social media and encourage others to act!