Fonds de Compensation

The Fonds de Compensation de la Sécurité Sociale, SICAV-FIS (FDC) was created in 2007 as a specialised investment fund to invest part of Luxembourg’s excess pension reserves. As a public institution, FDC is subject to the supervision of Luxembourg’s Minister of Social Security. As of the end of December 2015, FDC holds €15.81 billion assets under management.[i]

At the end of 2011, FDC formalised its socially responsible investment policy by excluding companies that do not respect international standards and conventions ratified by the Grand Duchy of Luxembourg.[ii] As Luxembourg is a party to the Non-Proliferation Treaty and the Comprehensive Nuclear Test-Ban-Treaty, FDC excludes all businesses involved in the production, development, maintenance and trade of nuclear weapons or delivery systems that are specifically designed for nuclear weapons.[iii] FDC does not exclude companies that produce ‘dual use’ delivery systems.[iv]

The exclusion policy applies to all of FDC’s investments made on its own account and discretionary mandates. However, the policy is not applied to investments made on behalf of third parties nor to all internal actively and passively managed funds. [v] External asset managers have to comply with the policy.[vi]

FDC’s publicly available exclusion list is revised every six months and is based on the findings of external research organisation Global Engagement Services (GES).[vii] As of May 2016, FDC excludes 18 companies for involvement with nuclear weapons: Aecom Technology Corp; Aerojet Rocketdyne Hldgs; Airbus Group; BAE Systems; Boeing Co; BWX Technologies; Finmeccanica; Fluor Corp; General Dynamics Corp; Honeywell International; Huntington Ingalls Industries; Jacobs Engineering Group; Lockheed Martin; Northrop Grumman Corp; Orbital ATK; Raytheon Company; Safran Group, and and Serco Group. [viii]

FDC was also found to have several investments in nuclear weapon producing companies identified by this report, more information can be found in the Hall of Shame.

We commend Fonds de Compensation for adopting a public policy on nuclear weapons. We recommend Fonds de Compensation exclude all types of nuclear weapons producing companies, including companies that produce ‘dual use’ system that are used for nuclear warfare, and apply the exclusion policy to all financial products, including to investments made on behalf of third parties and all internal actively and passively managed funds. We look forward to engaging with Fonds de Compensation, so a strong and comprehensively applied policy may be listed in the Hall of Fame in a future update of this report.

 

Fonds de Compensation's policy on nuclear weapons is leaky. Tell them to fix it!

Congratulations Fonds de Compensation!

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Congratulations Fonds de Compensation. I saw on www.dontbankonthebomb.com that you have a policy limiting investments in nuclear weapons. I think it’s really important that you share my concern about these weapons, and I appreciate that there is a public policy.

However, the policy does have some loopholes and the Don’t Bank on the Bomb report shows how you still might invest in nuclear weapons producers. I am concerned about this, because Fonds de Compensation also invests my money and I don’t want to be associated in any way with the production of these inhumane weapons.

It would be great if Fonds de Compensation made the following changes to make the policy airtight:
• Exclude all types of nuclear weapons producing companies, including companies that produce   ‘dual use’ system that are used for nuclear warfare.

With kind regards,

 

Website:
www.fdc.lu/


[i] Fonds de Compensation, “Presentation”, website Fonds de Compensation (http://www.fdc.lu/en/organisation-and-governance/), viewed 22 September 2016.

[ii] Fonds de Compensation, “Socially Responsible Investment”, website Fonds de Compensation (http://www.fdc.lu/en/strategie-dinvestissement/investissement-socialement-responsable/), viewed 22 September 2016.

[iii] Fonds de Compensation, “Socially Responsible Investment”, website Fonds de Compensation (http://www.fdc.lu/en/strategie-dinvestissement/investissement-socialement-responsable/), viewed 22 September 2016; Fonds de Compensation, written response to Profundo dated 14 August 2013; Fonds de Compensation, written response to Profundo dated 24 June 2014.

[iv] Fonds de Compensation, written response to PAX dated 5 May 2015.

[v] Fonds de Compensation, written response to PAX dated 5 May 2015.

[vi] Fonds de Compensation, written response to Profundo dated 24 June 2014; Fonds de Compensation, written response to Profundo dated 26 June 2014.

[vii] Fonds de Compensation, “Socially Responsible Investment”, website Fonds de Compensation (http://www.fdc.lu/en/strategie-dinvestissement/investissement-socialement-responsable/), viewed 22 September 2016

[viii] Fonds de Compensation, “FDC Exclusion List”, 15 May 2016, (http://www.fdc.lu/fileadmin/file/fdc/Liste_d_exclusion_20160515.pdf#pageMode=bookmarks), viewed 22 September 2016.

Runners-up

Who divests?

Policy Research

The financial institutions presented all have publicly available policies – or summaries thereof – excluding investments in nuclear weapons producing companies. Since the banking group usually sets the investment policy and since the group directly or indirectly supervises its subsidiaries, we research the group policy only.

The Hall of Fame section highlights financial institutions that have comprehensive policies preventing investments in nuclear weapon producers. These policies meet all of the criteria.
The Runners-Up provides information on existing policies and makes recommendations for how to strengthen them.

Criteria:

Hall of Fame finanical institution policies policy must:

1. Exclude all nuclear weapon associated companies

The policy excludes:

  • whole companies not only nuclear weapons related projects
  • companies associated with nuclear weapons including through joint ventures
  • companies regardless of their country of origin
  • companies regardless their country of operation

2. Exclude all nuclear weapon associated activities

The policy excludes companies associated with:

  • development, testing, production, maintenance or trade of nuclear weapons related technology, parts, products or services, and;
  • delivery systems such as missiles, that are specifically developed for nuclear tasks. This includes technology that is designed for ‘dual use’ (military and civilian) but excludes technology that is not designed for, but can be used in nuclear warfare. It does not include delivery platforms such as bombers and submarines.

3. Apply to all the institution’s products and services

The institution applies the policy:

  • for the entire Group, including subsidiaries
  • in all markets
  • to all asset management classes – passive and active, internal and external.
  • to all existing and future investments.

The financial institutions in the Hall of Fame have not engaged in any financial relationships with any of the nuclear weapon associated companies listed in this report. The policies of over 80 financial institutions were analysed for this report.

Runners-Up are financial institutions whose nuclear weapons policy does not meet all of the above criteria .

Methodology

To identify financial institutions with a policy on nuclear weapons, we research a variety of sources: NGO reports, screening-agency information, financial institution reports and websites, information from campaigners and other public sources. For practical reasons, the scope of this report is limited to those financial institutions that have an investment policy or a summary of that policy in English. The list of institutions in the Hall of Fame is not exhaustive. We welcome additions from those able to provide them.

For the purposes of this report, nuclear weapon producers are defined as companies that produce key components to test, develop, maintain, modernise and deploy nuclear weapons. There are countless companies involved in the broad nuclear weapons complex, and this report only details those most heavily involved in the production and maintenance of nuclear warheads and their delivery systems (such as missiles and launch tubes). The report does not include companies involved in the production of delivery platforms (such as nuclear capable bombers and submarines).

In advance of this report, all financial institutions were asked to fill in a standardised questionnaire with detailed questions on the scope and content of their policies. Financial institutions that did not respond are not included. Of the thirteen financial institutions listed in the Hall of Fame, six publish a list of companies that they exclude from their investment universe. The companies excluded are listed in the profiles of the financial institutions as a resource. Three other financial institutions in the Hall of Fame work with an inclusion list rather than an exclusion list. The remaining four do not make their lists public.

Each financial institution profile in the Hall of Fame includes a brief description of the institution, a summary of key policy elements, and the exclusion list if applicable. We researched investments in companies on our producers list for each of the financial institutions listed in the Hall of Fame. None of the financial institutions listed in the Hall of Fame invest in any of the 26 identified nuclear weapon producers.