By R. Nastranis
The International Campaign to Abolish Nuclear Weapons (ICAN), a global grassroots organisation, has thrown a virtual bombshell: In a trailblazing report, it reveals the funders and manufacturers of 20,000 nuclear weapons in the possession of nine nuke-armed nations, which have a collective destructive force equivalent to 150,000 Hiroshima-sized bombs.
Yet, undeterred by the annihilation their existing arsenal can cause, each year, the nine – the U.S., Russia, China, the UK, France, Pakistan, India, Israel and North Korea – are spending a combined total of more than US$100 billion on weapons of mass destruction by assembling new warheads, modernizing old ones, and building ballistic missiles, bombers and submarines to launch them.
Don’t Bank on the Bomb: The Global Financing of Nuclear Weapons Producers is the first major global report on the financing of companies that manufacture, modernize and maintain nuclear weapons and their delivery vehicles. It identifies more than 300 banks, insurance companies, pension funds and asset managers from 30 countries that invest significantly in 20 major nuclear weapons producers.
According to the 180-page study, released on March 5, 2012, much of the work is being carried out by corporations such as BAE Systems and Babcock International in the United Kingdom, Lockheed Martin and Northrop Grumman in the United States, Thales and Safran in France, and Larsen & Toubro in India.
Of the 322 financial institutions identified in the report, roughly half are based in the United States and a third in Europe. Asian, Australian and Middle Eastern institutions are also listed. The institutions most heavily involved in financing nuclear arms makers include Bank of America, BlackRock and JP Morgan Chase in the United States; BNP Paribas in France; Allianz and Deutsche Bank in Germany; Mistubishi UJF Financial in Japan; BBVA and Banco Santander in Spain; Credit Suisse and UBS in Switzerland; and Barclays, HSBC, Lloyds and Royal Bank of Scotland in Britain.
ICAN is appealing to financial institutions to stop investing in the nuclear arms industry. “Any use of nuclear weapons would violate international law and have catastrophic humanitarian consequences. By investing in nuclear weapons producers, financial institutions are in effect facilitating the build-up of nuclear forces. This undermines efforts to achieve a nuclear-weapon-free world and heightens the risk that one day these ultimate weapons of mass destruction will be used again,” says ICAN campaigner Tim Wright, a co-author of the report.
The report also examines selected institutions’ policies on financing nuclear weapons: It points out that many financial institutions, funding nuclear weapons programmes, claim to apply ethical standards – such as the UN Principles for Responsible Investment – when deciding how to invest their funds. These standards take into account environmental, social and corporate governance factors.
Some financial institutions, in addition to maintaining general policies on ethical or sustainable investment, specifically state that they will not invest in nuclear armaments. But the report shows that “their policies on nuclear weapons investments often fall short of imposing a blanket ban on the financing of nuclear weapons companies.”
For example, some banks rule out providing loans specifically for nuclear weapons projects, but they are willing to provide loans to nuclear arms makers for general purposes, says the report, adding: “Investing in companies that manufacture and modernize nuclear weapons is a grave breach of ethical investment norms, as nuclear weapons are illegal to use and cause catastrophic humanitarian and environmental harm.”
All nuclear weapons companies, listed in the ICAN study, are engaged in a diversity of enterprises, many of which are non-nuclear in nature – for example, Boeing builds commercial jetliners. These companies generally do not source direct finance from banks solely for the purpose of carrying out nuclear weapons work.
Instead, they raise money through corporate loans, syndicated loans, bond issues, share placements and share ownership. This money is allocated in whatever way a company sees fit. However, “whether or not the financier or investor intended the money to be used for nuclear weapons production makes little practical difference,” says the report.
It argues: When nuclear weapons companies raise finance for “general corporate purposes”, a proportion of the funds they raise will likely be used to produce nuclear weapons. It is important therefore that “if banks and other financial institutions wish to avoid facilitating the manufacture of nuclear, they must adopt more stringent policies that exclude the financing of nuclear weapons companies altogether.” But the existing policies of some financial institutions have little if any practical effect.
The report emphasizes the humanitarian, legal and environmental arguments for divestment, noting the unique destructive potential of nuclear weapons. Setsuko Thurlow, a survivor of the US atomic bombing of Hiroshima in 1945, writes in the report: “Anyone with a bank account or pension fund has the power to choose to invest his or her money ethically – in a way that does not contribute to this earth-endangering enterprise.”
In addition to stating the ethical case for divestment, the report also warns of the reputational risks associated with financing nuclear arms, and highlights the positive role that financial institutions could play in the quest for a world free from such weapons.
South African activist and Nobel Peace Prize winner Desmond Tutu, a supporter of ICAN, contributed the foreword to the report, in which he calls on financial institutions to “do the right thing and assist, rather than impede, efforts to eliminate the threat of radioactive incineration”, noting that divestment was a vital part of the successful campaign to end apartheid in South Africa.
“Today, the same tactic can – and must – be employed to challenge man’s most evil creation: the nuclear bomb. No one should be profiting from this terrible industry of death, which threatens us all,” writesTutu.
Since the present situation is not God given, with the information and arguments contained in the ICAN report, concerned citizens can put pressure on listed and other financial institutions around the world to end their support for the nuclear weapons industry.
By lending money to nuclear weapons companies, and purchasing their shares and bonds, banks and other financial institutions are indirectly facilitating the build-up and modernization of nuclear forces, thereby heightening the risk that one day these ultimate weapons of terror will be used again – with catastrophic humanitarian and environmental consequences.
According to disarmament campaigners, divestment from nuclear weapons companies is an effective way for the corporate world to advance the goal of nuclear abolition.