Boeing has been blacklisted by the largest Nordic fund company over concerns that the civil and defence aerospace group is producing nuclear weapons.
Nordea Asset Management, which oversees €174bn of assets, told FTfm it added Boeing to its exclusion list in May due to the group’s involvement in producing components for replacement nuclear-armed Trident ballistic missile submarines in 2014.
The exclusion creates further problems for Boeing, which has already been blacklisted by the world’s largest sovereign wealth fund and a number Europe’s largest pension funds.
Sasja Beslik, head of corporate governance at Nordea, said: “Boeing is in the process of developing a new nuclear programme, [which means] we cannot engage with them. These companies will not change their business models, because [nuclear] is too lucrative.”
Boeing said in a statement: “Boeing is proud to support airlines, and US and allied military and government customers in 150 countries. We remain focused on meeting the needs of our customers, extending our industry leadership through disciplined investments and continuing to provide increased returns for our shareholders.”
Nordea already excludes a handful of companies involved in manufacturing or supplying nuclear weapons, including UK groups BAE Systems and Babcock International and Areva of France.
Nordea does not have a policy against investing in companies that are involved in maintaining existing nuclear arsenals. The fund group’s stance on Boeing changed due to its work on replacement Trident systems.
Mr Beslik said: “We do not believe that the development of new nuclear weapons is needed and we do not want to contribute to the expansion of this business as the potential use of [nuclear arms] is extremely damaging to mankind.”
Nordea joins a number of large European investors that have blacklisted Boeing as a result of their “responsible investment” policies.
The Norwegian Government Pension Fund, the world’s largest sovereign wealth fund, has blacklisted 10 companies involved in the production of nuclear weapons, including Boeing, since 2005.
PGGM, the second-largest Dutch pension fund manager, with €189bn of assets, has similarly excluded more than a dozen companies, including Boeing, over their involvement in nuclear arms since 2008.
Pieter van Stijn, responsible investment adviser at PGGM, said the asset manager added CNIM, the French engineering company, to its exclusion list in January due to its involvement in France’s nuclear missile programme, M51.
Aecom, the US engineering company, was also added to PGGM’s exclusion list after it acquired URS, a San Francisco-based engineering and design group involved in nuclear weapon research, in October of last year.
Mr van Stijn said: “We do not want to be involved in weapons that will cause many casualties [and harm] innocent bystanders. It is about cleaning the portfolio — we are not trying to change [these companies’] business models.”
Other institutional investors have less stringent policies, opting only to exclude companies that have breached the 1970 non-proliferation treaty, which allows five countries (the US, the UK, Russia, China and France) to maintain nuclear arsenals.
APG, the largest Dutch pension fund, and four of the Swedish government AP pension schemes, known as the AP funds, have taken this approach.
A spokesperson for APG said the scheme had dumped its €20m stake in India’s Larsen & Toubro in January after the Mumbai-based conglomerate “refused” to clarify whether it was involved in the manufacturing of nuclear submarines.
According to Mr Beslik, some institutional investors, including the AP funds, are considering revising their policies regarding investment in nuclear arms manufacturers or suppliers. “[Divestment] would have a much bigger impact if more investors were behind it,” he said.
John Howchin, secretary-general of the ethical council for the AP funds, said their nuclear arms policy was reviewed five years ago. “There are currently no plans to look at this issue,” he said.
(reposted from the Financial Times)
Financial Times — May 3, 2015