The ethical committee of the Norwegian Government Pension Fund recommended this week to include significant policy improvements on issues that PAX has advocated for, including nuclear weapons, lethal autonomous weapons and controversial arms trade. In brief, it builds the norm against weapons causing indiscriminate harm and against the controversial arms trade.
The Norwegian Government Pension Fund Global invests oil revenues on behalf of all Norwegians and is the second largest pension fund on the planet. The fund (worth over EUR933 billion) is seen as a key player and actor that many other financial institutions look to. Its responsible investment policies are based on recommendations of a special ethics committee. Earlier this week, this committee issued a report with recommendations for strengthening the Funds’ ethical framework. In the past, when the Council on Ethics changed its guidelines around weapons systems, others have followed suit- notably with companies identified for exclusion.
Excluding inhumane weapons
The recognition of lethal autonomous weapons as “problematic as a matter of principle” is groundbreaking. The committee suggests excluding companies involved in developing or producing lethal autonomous weapons from the Fund’s investments. When implemented this would make the Fund one of the first financial institutions worldwide to implement such an exclusion, a reflection of the growing awareness of the issue of lethal autonomous weapons.
The committee also recommends the exclusion of nuclear weapons producers is expanded to companies involved in the development and production of key components of nuclear weapons and some platforms that are designed for delivering nuclear weapons. This would apply to submarines primarily, and could result in companies like Rolls-Royce or General Dynamics being added to the exclusion list.
Human rights and arms trade
The Fund’s guidelines on arms trade to countries involved in human rights violations were previously too strict and had only rarely led to companies involved in the sale of arms being excluded from investment. The report now recommends that the Fund should look specifically at whether companies sell weapons to states involved in armed conflict with a high risk of violations of International Humanitarian Law. This is a major step forward: it shows the Committee wants to avoid continued investment in companies that sell arms to countries that are known offenders of international humanitarian law. Since this includes Saudi Arabia, which many arms producers sell weapons to, this potentially has significant implications.
PAX and the financial sector
Together with our international coalition partners in the Campaign to Stop Killer Robots, the International Campaign to Abolish Nuclear weapons (ICAN) and the Fair Finance Guide, PAX submitted recommendations to the committee during its review process and also met with representatives of the committee. The committee report shows that these recommendations were valuable and incorporated, showing the impact that civil society engagement with the financial sector can have.
PAX leads several projects related to controversial weapons and the financial sector. We produce independent research on the companies involved in the development and production of controversial weapons like nuclear weapons, autonomous weapons and companies that are involved in the sale of weapons to controversial destinations. Based on this research, we campaign for financial institutions to engage with and divest from these companies. Divestment contributes to the norm against inhumane weapons and controversial arms trade. It also puts real pressure on companies that are trying to profit from of such controversial activities.