FEWER LONG-TERM INVESTMENTS were made in the companies behind the nuclear weapons industry, according to a new report, Risky Returns, published by PAX (the largest peace organisation in the Netherlands) and ICAN, the International Campaign to Abolish Nuclear Weapons.
The total value of investments in 24 named nuclear weapon producers was higher than previously, but this is partly attributed to share price variances through a turbulent year in the defence sector. However, data from the Don’t Bank on the Bomb report shows a $45.9 billion drop in 2022 in long-term investments, including loans and underwriting. This could signal that a growing number of long-term investors do not see nuclear weapon production as a sustainable growth market and regard companies involved in it as a risk to be avoided.
The report provides an overview of investments in 24 companies heavily involved in the production of nuclear weapons for the arsenals of China, France, India, the Russian Federation, the United Kingdom and the United States. Overall, the report finds that 306 financial institutions made over $746 billion available to these companies, in loans, underwriting, shares or bonds. US-based Vanguard remains the biggest investor, with $68.18 million invested in the nuclear weapon industry.
The report notes an increase in the total value of shares of the nuclear weapon producers based on the June 2022 snapshot of holdings. Some nuclear weapon producers also produce conventional weapons and saw their stock values rise, likely resulting from the announcements by NATO states that they would significantly increase defence spending. Share value increased by $108.5 billion, but the report shows no increase in the number of investors in the nuclear weapon producers. Increasingly, mandatory due diligence legislation in Europe, and the anticipation of such laws, is raising questions around investments in arms producers.
The report authors say that in a year marked by heightened global tensions and fears of nuclear escalation, investors should send a clear signal to the world that nuclear weapons are unacceptable and end their relationship with these companies,
Alejandra Muñoz, from the No Nukes project at PAX said: “Banks, pension funds and other financial institutions that keep investing in nuclear weapon producers enable these companies to continue their involvement in the development and production of weapons of mass destruction. The financial sector can and should play a role in ongoing efforts to reduce the role of nuclear weapons in society.”
The Executive Director of ICAN, Beatrice Fihn, said the long-term trend shows the growing stigma attached to nuclear weapons is having an effect: “The Treaty on the Prohibition of Nuclear Weapons – the TPNW – that came into force in 2021 has made these weapons of mass destruction illegal under international law. Involvement in producing nuclear weapons is bad for business, and the long-term impact on human rights and the environment of these companies’ activities is making them a riskier investment.”
* Read the report Risky Returns, here.
* More about PAX here.