European financial institutions invest billions in arms companies that sell weapons to Israel.

Image: Tsafrir Abayov/AP/ANP

June 20, 2024

A new report published by a group of 19 civil society organizations and trade unions exposes the largest European financial institutions investing in international arms producers that sell weapons to Israel. In total, these financial institutions have provided 36.1 billion EUR in loans and underwritings, and hold 26 billion EUR in shares and bonds in these companies. By selling weapons to Israel, arms producers run a high risk of facilitating ongoing severe violations of international humanitarian law, crimes against humanity and, plausibly, genocide in Gaza. The banks, pension funds and other asset owners providing finance to these companies should take urgent action and divest from companies that do not immediately stop selling arms to Israel.

From 2019 to 2023, six of the world’s largest arms producers -Boeing, General Dynamics, Leonardo, Lockheed Martin, RTX and Rolls-Royce- have sold weapons or weapon systems to Israel, despite clear human rights risks. Through these sales, these companies run a high risk of contributing to severe violations of international humanitarian law in Gaza. French bank BNP Paribas is by far the largest finance provider to companies that have sold weapons to Israel, having provided 5.7 billion EUR in loans and underwritings since 2021. Other large investors identified by the report include the banks Crédit Agricole, Deutsche Bank, Barclays and UBS, as well as the Norwegian government pension fund GFPG and the insurance company Allianz.

According to the international standards on business and human rights, financial institutions have a clear responsibility to ensure that they do not invest in companies that contribute to human rights violations. Previous research by Dutch peace organization PAX, one of the civil society organizations, pointed out that all six arms companies identified in the report have been supplying weapons to states involved with violations of human rights or international humanitarian law, including to Israel.

Over the last eight months, following the attacks of 7 October 2023 by Hamas and other Palestinian armed groups that killed 1,200 people and during which about 240 people were taken hostage, the Israeli government has launched an unprecedented military assault on Gaza. This military assault has killed over 37,000 Palestinians and has led to the large-scale destruction of the Gaza strip and to a massive humanitarian catastrophe. International human rights organizations and UN officials have repeatedly pointed to the severe violations of international humanitarian law being committed. The Dutch appeals court referenced the risk of such violations as the basis for its ruling in February this year that the Netherlands needs to stop exporting F-35 fighter jet parts to Israel. Moreover, on 26 January 2024, the International Court of Justice ordered Israel to take all measures in its power to prevent genocide in Gaza. UN officials and human rights organizations are calling for an immediate end of arms transfers to Israel.

 “Since 7 October 2023 the already existing human rights risks inherent to transferring arms to Israel have become even more severe”, says Cor Oudes, researcher at PAX. “Action is even more urgently needed. Financial institutions should put urgent pressure on these companies to immediately stop supplying arms to Israel and divest if the companies continue their supply”.

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