Responses from Financial Institutions

In the course of preparing Don’t Bank on the Bomb, the International Campaign to Abolish Nuclear Weapons attempted to make contact with some of the financial institutions identified as being substantively involved in financing nuclear weapons companies. Also, each financial institution with a policy concerning nuclear weapons was contacted in advance of the 2013 and 2014 updates of the report.

Here are some responses:



Commonwealth Bank of Australia

The Commonwealth Bank wrote to ICAN on 30 November 2011:

At the Commonwealth Bank, we strive to incorporate environmental, social and governance considerations into each of our lending decisions. We are working to continuously improve our corporate governance policies and practice and, with regards to risk management, we have developed a well-articulated and Board approved Risk Appetite Statement.

The Risk Appetite Statement fundamentally guides our risk culture, represents a boundary on risk-taking activities and underpins operational activities within the Bank. A key tenet of the Risk Appetite Statement is that the Bank is intolerant to actions that could damage the Bank’s reputation, which extends to any action that involves illegal activities.

At the Commonwealth Bank, we are proud of our reputation, and the guiding principles under which the business operates are designed to at all times support and enhance this reputation.

Westpac Group

The Westpac Group wrote to ICAN on 2 November 2011:

The Westpac Group has position statements to clarify our approach to assessing the Environmental, Social and Governance (ESG) Risk Management Framework of our financing and lending activities. These include a description of our ESG Credit Risk Policy, “Westpac’s Approach to Sustainable Finance”, as well as position statements on the defence and energy sectors.

Westpac’s position statement on the defence sector, from September 2010, states:

Westpac will not provide direct financing for controversial weapons. Controversial weapons include those weapons which are banned by international arms control treaties ratified by Australia.



Ackermans & van Haaren

Akermans & van Haaren wrote to ICAN on 9 January 2012:

We received a letter from you stating that we are involved and financing the Redhall Group which is involved in the production of nuclear weapons. As we do not know this company, we would like to ask you where you got this information.

ICAN clarified that the shares are owned by J. M. Finn & Co., a British subsidiary of Ackermans & van Haaren. ICAN has received no further response.

KBC Group

KBC Group wrote to ICAN on 2 February 2012:

Further to your letter dated 22 December 2011 regarding KBC Group’s alleged involvement in the financing of nuclear weapons producers and in particular through the ownership or management of shares of Redhall Group, we have investigated this particular issue.

Based on our investigations, we can confirm that KBC Group is not and has not been involved in the financing of Redhall Group. KBC Securities has no and has not had any trading exposure to Redhall Group. KBC Asset Management states that Redhall Group is not known in their system, so it’s technically impossible that KBC Asset Management would have owned or managed shares of Redhall Group.

Unless you would have and could provide us with very clear  proof of the contrary, we hope that you will mention our non involvement  in your global report and take it into consideration in the conclusions you draw.

ICAN informed KBC that the report states that its subsidiary Brown Shipley owns a 3.32% share in Redhall Group, based on information contained in the latest annual report of the Redhall Group. KBC Group responded on 14 February 2012:

We can confirm that Brown Shipley is an indirect subsidiary of KBC Group NV through its subsidiary KBL epb. However, I would like to add to this that on 10 October 2011 the KBC Group reached an agreement with Precision Capital for the sale of KBL European Private Bankers and all its subsidiaries, including Brown Shipley … The closing of this sale is subject to customary regulatory approvals and is expected to be completed in the first quarter of 2012.

So, after completion of the aforementioned sale Brown Shipley will no longer part of the KBC group. We informed KBL epb on this matter, so they were able to investigate it further. They confirmed that Brown Shipley did not have a material holding in Redhall Group at 30/09/2011 or 31/12/2011. They had a stake of 264,669 shares, representing 0.89%.

Brown Shipley’s reduced bondholding in the Redhall Group is confirmed in the Redhall Group’s December 2011 financial statement, which was published subsequent to ICAN’s research period. Nonetheless, the 0.89% bondholding is still above the threshold of 0.5% used throughout the report.



Power Corporation of Canada

Power Corporation of Canada wrote to ICAN on 16 January 2012:

We would like to inform you that we do not hold bonds or shares of either of the above-mentioned companies [Alliant Techsystems and Northrop Grumman]. We would greatly appreciate it if you could advise us where you obtained this information.

ICAN clarified that the shares and bonds in question were held by Putnam Investments (which the Power Corporation acquired in 2007) and Great West Life & Annuity Insurance (which the Power Corporation controls indirectly). ICAN has received no further response.

Ontario Teachers’ Pension Plan

Ontario Teachers’ Pension Plan wrote to ICAN on 11 January 2012:

While we can understand your point of view, the Ontario Teachers’ Pension Plan has a duty to look at all investment opportunities that will help to pay teachers’ pensions in the future. We believe companies that are responsible, well governed, and compliant with social and industry standards and regulations make good long-term investments. We expect investee companies to respect and comply with the laws and standards of the countries in which they operate.

When selecting investments, part of our due diligence process is to consider all risk factors, including the impact that environmental, social and governance factors could have on a company’s long-term performance.  But we cannot select or exclude a company or sector solely on the basis of non-financial factors; the pension fund’s investments must be in the best financial interest of all plan members.

European Union

European Union

European Investment Bank

The European Investment Bank wrote to ICAN on 19 January 2012:

We would first like to inform you that the EIB has a number of excluded activities that are not eligible for its financing. This group of excluded activities specifically includes ammunition and weapons and military/police equipment or infrastructure. Additional information on these excluded activities is available on our website.

As the European Union’s (EU) financing institution, the EIB makes long-term loans for sound capital investment projects (mainly fixed assets) in order to contribute towards EU policy goals. Within this context, the companies that you have mentioned in your letter [Finmeccanica, Rolls-Royce and Safran] have only benefited from EIB loans for the financing of specific and clearly identified eligible projects, none of which were defence-related. To be precise, the EIB does not fund companies in general but only specific projects, which might have a variety of companies involved in heir construction. The EIB monitors its loans to ensure they are only used for these agreed purposes.



BNP Paribas

BNP Paribas wrote to ICAN on 19 March 2012:

BNP Paribas considers that arms control should firstly be addressed by international law and through multilateral negotiation processes. Furthermore, as an institution financing the real economy in an ethical and transparent way, the Group has developed a cautious approach toward arms trade, which aims to exclude certain weapons and their producers, as well as certain final destinations for arms exports. This approach is meant to manage proven risks and to address some aspects of arms trade not regulated under international law.

BNP Paribas has thus issued a public financing and investment policy for the Defense sector in December 2010. This policy excludes any relationship with the companies involved in the production of some controversial weapons or of the key and dedicated components parts of thereof: cluster-munitions, anti-personnel mines, depleted uranium weapons, biological and chemical weapons. As for nuclear weapons, BNP Paribas excludes to maintain any relation with companies involved in their production apart from those involved in the nuclear programs of the “nuclear states” of the Non Proliferation Treaty that are members of the North Atlantic Alliance (France, UK, USA). Moreover, those three states are involved since 1989 in a constant trend to reduce the size of their nuclear arsenals.

The Group also maintains a reinforced due diligence on export and trade financing of dual-use goods to countries at risk of proliferation. This vigilance is also leveraged through its “nuclear power production” policy which includes due diligence criteria to prevent nuclear proliferation through the civil sector.

To comply with this policy, since December 2010 BNP Paribas excluded from its activities more than 30 companies (both listed and non-listed) involved in the production of controversial weapons. This exclusion concerns all products and services of the Group (financing, international guarantees, leasing, etc), but also its investments. Some companies listed in the report as “being subject to BNPP investment” have, in fact, been excluded since December 2010. As a result, BNP Paribas has disinvested or is in the process of ending the relation with some former clients.



Deutsche Bank

Deutsche Bank wrote to ICAN on 11 January 2012:

Deutsche Bank is aware of the possible implications of its business activities. Within the framework of our certified sustainability management system we also take ethical issues into account.

In doing so, we adhere not only to national laws and regulations, but also to the respective guidelines of international organizations, such as the United Nations, World Bank and the European Union. We are specifically guided and bound by the Nuclear Non-Proliferation Treaty and associated international treaties.

Furthermore – as stated in our Credit Directives – we will not consider any involvement in transactions connected with specific types of weapons, in particular anti-personnel landmines, cluster bombs or ABC [atomic, biological, chemical] weapons.

Generally, the following applies: Deutsche Bank only participates in transactions when the corresponding environmental impact assessments and safety inspections are present, and international standards are met.

We take your concerns with regard to the involvements into the nuclear weapons sector very seriously. Apart from transactions that are public in nature, in general, Deutsche Bank for legal reasons is not in a position to comment on alleged, existing or non-existing client relationships.

Helaba Landesbank

Helaba Landesbank wrote to ICAN on 25 January 2012:

Helaba’s binding Business Strategy stipulates the incorporation of environmental and social aspects in the risk evaluation and management process. Currently Helaba is developing its existing Business Strategy further. After final approval of its Supervisory Board Helaba will be committed not to finance production and trading of cluster munition and land mines. Production and trading of weapons and military equipment, offending national or international law, will not be financed either.



Allied Irish Banks

Allied Irish Banks wrote to ICAN on 31 January 2012:

For reasons of confidentiality, it is Bank policy no to comment on reported customer relationship.

All applications for credit facilities are considered on a wide range of criteria, including the purpose for which the facility is sought. In addition, all areas of our business operate under a Code of Business Ethics which sets the standards for behaviour in AIB and which specifies that “Our policy is to operate to the highest ethical standards in compliance with all laws, regulations and codes of the jurisdictions in which operate”.



Gruppo BPER

Banca Popolare dell’Eemilia Romagna wrote to ICAN on 10 February 2012:

We may assure that our Group is sincerely interested and engaged about ethical themes (we have Business Partners like Amnesty International, Emergency, Banca Popolare Etica and Etic sgr).

During 2011 we realized, supported by some qualified consultants (Avanze company, from Milan) an articulated Guidelines about arms; our Board of Directors approved this document on January 10, 2012 and now we are preparing the Organizational Procedure to manage it.

I send you our Guidelines … on page 8 (3.1.1) we are speaking about “produttori di armi controverse” (producers of controversial weapons), and on page 9 (3.3.1) we are saying that “Le Banche del Gruppo escludono tassativamente qualsiasi rapporto con le aziende che producono armi controverse”. Banks of the Group strictly exclude any relationship with companies that produce controversial weapons.

On page 12 you find a synthetic summary where, all in the entire second column about “Controversial weapons”, you may see that our Policy is very clear: no.



Daiwa Securities Group

In a news report published by Kyodo News on 5 March 2012, Daiwa Securities Group said that it wants to consider how it can incorporate into its business “the viewpoint of eradicating nuclear weapons”.




In the Aegon 2013 Responsible Investing Annual Report, on page 21 Aegon featured a case study specifically about nuclear weapons and the Don’t Bank on the Bomb report. Explaining that the publication of the report caused them to reassess their policy. The Aegon policy excludes nuclear weapons producers, but makes an exception for those “companies that act in line with the Non-Proliferation Treaty (NPT) which prevents the  spread of nuclear weapons and weapons technology, but also recognizes 5 “nuclear weapons states” (the United States, the United Kingdom, France, Russia and China).”

Although the Aegon NL RI Committee and Aegon NL Management Board agreed not to revise the policy at this time, they  also agreed to monitor the debate on nuclear weapons to ensure that the policy continues to fairly reflect the views of their clients and other stakeholders.



Nordea Sweden

In a newspaper report in Fria Tidningen on 16 March 2012, a spokesperson from Nordea Sweden stated that the bank has a policy not to invest in companies that produce nuclear weapons. However, she would not comment on Nordea’s loan to Rolls-Royce in October 2011.

Skandinaviska Enskilda Banken

In a newspaper report in Fria Tidningen on 16 March 2012, a spokesperson from SEB declined to comment on the loans it had provided to EADS and BAE Systems, but she stated that it would not finance companies that are failing to comply with international conventions relating to certain weapons.


In a newspaper report in Fria Tidningen on 16 March 2012, a spokesperson from Swedbank acknowledged the problem of nuclear weapons, but stated the bank’s view that divestment is not the solution. He said that the bank believes that it can have the greatest influence through engagement with the businesses rather than boycotting. He also said that there is not enough pressure from customers to divest from companies that produce nuclear weapons.

In a post on the company’s Facebook page on 26 March 2012, it stated:

Swedbank Robur – which is a subsidiary of Swedbank – has funds that have invested in companies with ties to nuclear weapons since there are no international conventions banning the production of nuclear weapons in the five nuclear weapon states. If nuclear weapons were described as “illegal weapons” it had not been possible for the funds to invest in companies with ties to nuclear weapons. For example it is not a single one of Robur’s funds that invests in companies that develop, produce or sell antipersonnel mines and cluster bombs – because these are just “illegal weapons”.

Swedbank Robur has specific sustainability funds. The sustainability funds allows no weapons at all. We are very aware that that fund investors may not have as much insight into which companies the fund invests in, and often less than what these companies are doing. And here we can get better at providing information. And we want to get better.

We still urge you – and customers – to talk to one of the bank’s advisers; you can jointly review your particular situation. If you are keeping money in Swedbank funds as an investor you have the option to choose sustainability funds that do not allow any weapons at all. Making active choices is a way to influence. Every fund investor in Swedbank has the possibility to influence.



Julius Baer

Julius Baer wrote to ICAN on 29 February 2012:

We acknowledge your enquiry regarding the involvement of Julius Baer in the financing of nuclear weapon producers and your suspected holdings of Julius Baer in bonds and/or equities in the French industrial conglomerate Safran.

As you are certainly aware of, Julius Baer is a financial services company solely focused on providing individuals and families around the globe with outstanding private banking advisory and services. As we pursue a truly open product platform approach, Julius Baer procures products or executes securities transactions in the market on behalf of our clients. As a result, the financial assets we report as assets under management are mainly invested with strict consent and upon the explicit order of our clients.

This also applies to the holdings we identified in Safran, where total holdings on behalf of our clients in Safran bonds amount to a small single digit million amount in CHF and in Safran equities amounting to clearly below the one million CHF threshold. Our advisory services to clients cover all aspects of an investment, with the aim to provide our clients with a sound basis to rest his or her unbiased decisions upon.

Julius Baer’s bondholding in Safran is therefore considerably lower than the latest publicly available data at the time we concluded our research (November 2011).


Swisscanto Asset Management Ltd wrote to ICAN on 16 January 2012:

Whilst we are very much aware of the issue you address, hard facts on producers of nuclear weapons are difficult to find. On the basis of publicly available information, Swisscanto does not classify either Rolls-Royce (nuclear propulsion for the Royal Navy’s submarines) or the Safran Group (navigation systems of nuclear attack submarines) as producers of nuclear weapons. Therefore, we do not consider ourselves as involved in the financing of nuclear weapons producers.

While Swisscanto excludes companies with involvement in the production chain of weapons (e.g. missiles, navigation systems) and/or military vessels (e.g. submarines) from its sustainable equity/bond investment funds, these companies are not excluded from the other equity/bond investment funds. Swisscanto currently manages considerably less than 1% of the total outstanding bonds of Rolls-Royce and the Safran Group, respectively.

Swisscanto is a leading Swiss asset manager and very committed to sustainable investments and to entrepreneurial sustainability in general. Since 1998, Swisscanto has pioneered the development of investment funds combining economic requirements with ecological and social aspects. Furthermore, Swisscanto signed the United Nations Principles for Responsible Investment (UNPRI) in March 2010 and since then has comprehensively included ESG [environmental, social and governance] standards in its investment analyses and decisions.

Swisscanto has established the most varied processes in order to allow all the findings, which have been gained within the context of sustainable investments, to be included in the design of the product. In this way we ensure that our actively managed assets are constantly improved with regard to sustainability. As a signatory of the UNPRI as well as of the Eurosif (European Sustainable Investment Forum) requirements, we assume responsibility for creating the necessary transparency. In this connection, for example, Swisscanto counts on the expertise of Inrate and bases itself on the recommendations of the independent Sustainability Advisory Committee which is filled with acknowledged personalities and provides us with important inputs.

Swiss Re

Swiss Re, or Swiss Reinsurance Company, wrote to ICAN on 1 February 2012:

Swiss Re shares your concerns regarding the proliferation of nuclear weapons as one of the key challenges of today. Therefore as part of our Sustainability Risk Framework (SRF), Swiss Re abstains from providing business support to companies or institutions proscribed for involvement with nuclear weapons proliferation by one or several, but not necessarily all, OECD countries. Further, we do not participate in public or private insurance programmes for nuclear energy facilities, or research reactors in countries that are not members of the Non-Proliferation Treaty (NPT) or, if they are members, have been found by the International Atomic Energy Agency (IAEA) as in breach with the NPT. Furthermore, we do not provide business support for nuclear energy facilities, or non-medical reactors in countries that operate nuclear power plants, but do not comply with the Nuclear Supplier Guidelines (NSG) …

Swiss Re indeed holds investments in the two companies named in your letter [General Dynamics and Honeywell International]. We use transparent public benchmarks to guide the external management of our portfolio. Please note that our holdings in these two companies represent only 0.02% of our overall investments. Furthermore they constitute an insignificant fraction of the outstanding shares and bonds issued by these companies.

United Kingdom

United Kingdom

Lloyds Banking Group

Lloyds Banking Group wrote to ICAN on 13 January 2012:

In full recognition of public, social, ethical and moral concerns in this area, Lloyds Banking Group adopts what it believes to be a highly sensitive stance to this sector. Whilst the UK Government remains committed to maintaining its nuclear deterrent, and considers this vital to our National security, we must continue to provide the essential finance to the companies that make this deterrent possible. Should the UK Government stance on this issue change at any future point, then clearly we would seek to adapt our policies appropriately.

Lloyds Banking Group operates within a rigid policy framework and will not knowingly enter into business transactions with companies that do not fully comply with all local laws and relevant government regulations.