ICAN’s Nobel Peace Prize should alarm investors

October 2017

By: Michel Riemersma
The International Campaign to Abolish Nuclear Weapons (ICAN) has been awarded the Nobel Peace Prize 2017, "for its work to draw attention to the catastrophic humanitarian consequences of any use of nuclear weapons and for its ground-breaking efforts to achieve a treaty-based prohibition of such weapons". The Treaty on the Prohibition of Nuclear Weapons was adopted by the United Nations on 7 July 2017 and has now been signed by 53 countries. Although none of the countries having nuclear weapons are among them, the Treaty is important in stigmatizing nuclear weapons in the same way as the anti-personnel mines and cluster munitions treaties have successfully done in recent decades.

Part of ICANs campaign is the project ‘Don’t Bank on the Bomb’ of Dutch ICAN-member PAX. This project is “appealing to financial institutions to stop investing in the nuclear arms industry, as any use of nuclear weapons would violate international law and have catastrophic humanitarian consequences”. The 2016 ‘Don’t Bank on the Bomb’ study, done by Profundo, found that “390 banks, insurance companies, pension funds and asset managers from 26 countries were found that invest significantly in the nuclear weapon industry”. PAX argues that “financial institutions provide crucial and necessary support to companies, so that they are able to carry out their projects. Most nuclear armed states rely on private companies for the production, maintenance and modernization of their nuclear weapons”.

With the new Treaty, nuclear weapons are now illegal under international law. As many investors rely on guidance from national governments and international regulations for drafting responsible investment policies, they will have to make some tough decisions on the exclusion of nuclear weapons producers from their portfolios. Last month, the € 389 billion Dutch Government Pension Fund (ABP) argued that it will ignore the UN Treaty, because the Dutch government voted against the Treaty. It remains to be seen if this position will hold up against public pressure now ICAN and the Treaty have received such prestigious support.

On the day ICAN was awarded the Nobel Peace Prize, Norwegian NGO Framtiden revealed that “it is very likely that the Nobel Foundation is invested in companies involved in the production of nuclear weapons: Airbus, Boeing, Safran and Northrop Grumman Corp”. Whether correct or not, institutional investors and foundations without a well-developed responsible investment policy should be on the alert: if their external asset managers are not bound by a policy reflecting the investors’ beliefs and responsibilities, their money might end up in nuclear weapons’ companies.

Reputational risks are certainly looming. Laggards in responsible investment should be alarmed by the words Desmond Tutu, the ICAN supporter, Nobel laureate and citizen of a country that voluntarily dismantled its nuclear stockpile, spoke in 2013: “Let us not forget that it was only a few years ago when those who spoke about green energy and climate change were considered peculiar. Now it is widely accepted that an environmental disaster is upon us. There was once a time when people bought and sold other human beings as if they were mere chattels, things. But people eventually came to their senses. So it will be the case for nuclear arms, sooner or later.”

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