Sweden

Three (3) Financial Institutions currently invest or make available an estimated USD$ 477.54 million in nuclear weapons companies.

Hall of Fame

To identify financial institutions with a policy on nuclear weapons, we researched a variety of sources: NGO reports, screening-agency information, financial institutions’ reports and websites, information from campaigners worldwide and other public sources. Based on this information, 33 institutions were found with a published policy specifically excluding nuclear weapons companies.

We then examined the policies and found that 13 deserve a place in our Hall of Fame, because their policy fit the criteria:

    • The financial institution has published its policy and/or a summary of it;
    • The policy excludes investments in nuclear weapon companies (withdrawing past investments and avoiding future investments)
    • The policy has an ‘all-in’ comprehensive scope:
    • no exceptions for any types of nuclear weapon companies
    • no exceptions for any types of activities by nuclear weapon companies
    • no exceptions for any type of financing or investment by the financial institution

Financial institutions whose nuclear weapon policy does not meet all of the above criteria are included in the “Runners up”. None of the institutions listed in the Hall of Fame invest in any of the 27 identified nuclear weapons producers. A number of these financial institutions have also made their exclusion lists public. Where possible, the links to these lists have been noted for other institutions who wish to adopt similar exclusions.

Folksam (Private)

Folksam is a Swedish insurance company and one of the largest Swedish investment managers that offers a wide variety of insurance, savings and loan products.1 In Folksam’s annual report for 2012 it states that it excludes illegal weapons, such as cluster bombs, anti-personnel mines and nuclear weapons. All companies within Folksam apply these criteria. The subsidiary KPA Pension has adopted even tougher disqualifying criteria and, it does not invest in the arms industry at all.2 Fund managers engaged by Folksam are encouraged to adopt the UN Principles for Responsible Investments (PRI). Folksam continually informs the fund management companies about the exclusions that have been made due to Folksam’s ethical investment criteria, and requests information about how the fund management company acts on the basis of this information. ((Folksam, “annual review 2012”, p.36, available at http://www.responsible-investor.com/images/uploads/reports/Folksam.pdf, last viewed July 2013. )) Folksam regularly updates and publishes an exclusion list on its website.3

Folksam currently excludes ten companies because of their involvement in the production of nuclear weapons specifically or the more general category ´illegal weapons´.

 

KPA Pension (Private)

KPA Pension is the leading pension company in the local authority sector in Sweden. Folksam owns 60% of KPA and the Swedish Association of Local Authorities and Regions owns 40%. KPA Pension does not invest in companies or groups that produce weapons which are defined by KPA as products which are made to kill or harm people or devastate places and which are sold to military users.4 KPA makes its exclusion list public, and currently excludes 122 companies involved in the weapons industry.5

 

Runners up

These are financial institutions that have a published policy excluding investments in nuclear weapons companies, but who’s policy is not comprehensive in scope as it does not meet one or more of the following criteria:

  • no exceptions for any types of nuclear weapon companies
  • no exceptions for any types of activities by nuclear weapon companies
  • no exceptions for any type of financing or investment by the financial institution

The Runners up category is quite broad in definition and offers a place to some financial institutions that are almost eligible for the Hall of Fame, but also some institutions that are barely escaping the Hall of Shame. For each institution, we give a description of its policy and investments it currently has in any of the 27 producing companies, if any. We also comment on the reasons why any particular institution is not in the Hall of Fame.

By including a Runner up category, we aim to feed discussions on exclusion policies and their implementation. Ultimately, we hope of course to be able to welcome more institutions in the Hall of Fame in future updates.

Nordea (Private)

Nordea offers capital market products, savings products, asset management and life and pension products to approximately 11 million customers in the Nordic region and some new European markets. It is one of the largest financial services groups in the Nordic and Baltic Sea regions.Nordea does not invest in companies involved in the production of illegal weapons, i.e. biological weapons, chemical weapons, non-detectable fragments, blinding laser weapons, anti-personnel mines and cluster munitions. Furthermore, as of 2011 Nordea has decided to exclude companies that contribute to the production or development of nuclear programmes, i.e. companies’ contribution to nuclear programmes in the development and production phase.

 

As of 28 August 2013, 11 companies are excluded from the Nordea investment funds, due to involvement in the production or development of nuclear programmes.6The Nordea Investment Management policy framework is applied to all funds and portfolios managed by Nordea Investment Management. However, there is an exclusion for subsidiary funds investing in external funds products and funds within Nordea’s Guided Fund Universe. For these funds Nordea informs the external manager regarding companies’ breaches of international norms, when these occur, and recommend them to consider Nordea’s Policy for Responsible Investment in their own investment decisions.7Also, Nordea’s credit policy doesn’t specifically mention an exclusion of nuclear weapon producers.

The Nordea policy is not comprehensive in scope, as it does not apply to nuclear weapons companies responsible for maintaining nuclear weapons arsenals. Nordea also does not apply its nuclear weapons policy to all of its financial products, which are the reasons they can not be included in our Hall of Fame (yet). We commend Nordea for their policy and encourage them to further strengthen the policy so they may be listed in the Hall of Fame in our next report.

 

Swedbank (Private)

Swedbank is a modern bank firmly rooted in Swedish savings bank history. With 7.8 million

private customers and more than 600,000 corporate and organisational customers, Swedbank is Sweden’s largest bank by number of customers and the bank has a leading position in the home markets of Estonia, Latvia and Lithuania.8 Swedbank sees its policies regarding the defence industry as part of it human rights due diligence. In 2012, Swedbank created a Group-wide policy on human rights, which is seen as a first step in their implementation of the UN guiding principles on companies and human rights.9 Furthermore, Swedbank created a position paper focussed on the defence industry in which it defines it investment policy:

  • “Swedbank applies a zero tolerance principle for financial services to customers belonging to a Group that is manufacturing, modernizing, selling or buying illegal weapons such as anti-personnel mines, cluster bombs, chemical weapons and biological weapons.
  • Swedbank applies a zero tolerance principle for financial services to customers belonging to a Group that is manufacturing, modernizing, selling or buying nuclear weapons.
  • Swedbank never finances nor facilitates the export of defence equipment or services to any country that is subject to EU or UN sanctions. Swedbank always carries out assessments in all export credits with the aim of preventing that defence exports financed by Swedbank are used by foreign authorities to oppress their own populations or to support unjustified external aggression”.10

 

Swedbank initiated the implementation of its defence policy paper in 2013

<         Swedbank Defence Policy Paper, http://www.swedbank.com/corporate-sustainability/human-rights/position-on-defence-equipment/index.htm, last viewed 11 September 2013.)) and is analysing all relations with the defence industry (not solely the nuclear weapons industry). Swedbank has not made any group-wide retroactive adjustments to its credit portfolio, but some subsidiaries have begun to divest from nuclear weapons producers. Swedbank does not currently publish a black list of nuclear weapons producers, but plans to do so once its evaluation of relations with the defence industry is complete.11

 

Swedbank has made significant positive changes in their policy regarding nuclear weapons producers, but does not yet apply its policy to all of its financial products, nor has it recalled investments made in the past. The exclusion in the policy for third party products furthermore, such as funds available through Swedbank’s platforms or channels currently precludes it from inclusion in the Hall of Fame at this point in time. We commend Swedbank for their policy and encourage them to further strengthen the policy so they may be listed in the Hall of Fame in our next report.

 

Hall of Shame

This section contains the results of our research into which financial institutions are financing and/or investing in the 27 nuclear weapon companies The analysis was performed according to the methodology and thresholds defined in the methodology explanations below. Each section provides the following information for each financial institution:

  • The types of financial relations which the financial institution has with one or more nuclear weapon companies. The relations are grouped by loans, investment banking and asset management. Financial activities are listed alphabetically by nuclear weapons company for each category.
  • The name of the receiving company, the amount, the date and (if known) the purpose for each financial relation. For loans and bonds the maturity date is given, as well as the interest rate.

Nordea

Nordea currently has an estimated USD 156.04 million invested or available for the nuclear weapon producers identified in this report.

Loans

In October 2011,Rolls-Royce secured a five-year revolving credit facility with a value of £ 1,000 million (USD 1,543.2 million). The proceeds were used to refinance two existing syndicated facilities and for general corporate purposes. Nordea Bank participated in the 23-bank syndicate, committing an estimated amount of USD 46.3 million.12

Asset management

Table 165 provides an overview of the nuclear weapon producing companies in which Nordea Bank owns or manages 0.50% or more of the outstanding shares at the most recent available filing date.

Table 1         Shareholdings of Nordea Bank

Company Country % of all outstanding shares Value (USD mln) Filing date (range)
Rockwell Collins United States 0.64 40.0 31-Mar-2013 until 31-May-2013

Source: Thomson ONE Banker, “Share ownership”, Thomson ONE Banker (www.thomsonone.com), viewed July 2013.

 

Skandinaviska Enskilda Banken

Skandinaviska Enskilda Banken currently has an estimated USD$ 243.40 million invested or available for the nuclear weapons producers identified in this report.

Loans

In December 2010, BAE Systems secured a five-year revolving credit facility with a value of £ 2,000 million (US$ 3,161 million). The proceeds were used for refinancing and general corporate purposes. Skandinaviska Enskilda Banken (SEB) was part of the 24 bank syndicate, committing an estimated amount of US$ 132 million.[16]

In April 2011, EADS secured a five-year revolving credit facility with a value of € 3,000 million (US$ 4,345.3 million), at a base rate of EURIBOR+37.500bps. The proceeds were used for refinancing and for general corporate purposes. Skandinaviska Enskilda Banken (SEB) participated in the 39 bank syndicate, committing an estimated amount of US$ 111.4 million.[17]

Svenska Handelsbanken

Svenska Handelsbanken currently has an estimated USD 78.10 million currently invested or available for the nuclear weapon producers identified in this report.

Loans

In July 2010, General Dynamics secured a three-year revolving credit facility with a value of USD 1,000 million at a base rate of LIBOR+50.000bps. The proceeds were used to refinance the loan secured in July 2009 and to provide a backup for commercial paper. Svenska Finans International, a subsidiary of Svenska Handelsbanken, participated in the 21 bank syndicate, committing an estimated amount of USD 37.5 million. 13 

In July 2011, General Dynamics secured a revolving credit facility with a value of USD 2,000 million at a base rate of LIBOR+37.500bps. The facility was split in two tranches: a USD 1,000 million tranche due July 2016 and a USD 1,000 million tranche due July 2013, which replaced the loan secured in July 2010. The proceeds were used for refinancing and for general corporate purposes. Svenska Handelsbanken participated in the 22 bank syndicate, committing an estimated amount of USD 78.1 million. 14

 

 

References


  1. Folksam, “About Us”, Folksam website (http://www.folksam.se/english/), viewed 5 April 2012. 

  2. Folksam, “annual review 2012”, p.35, available at http://www.responsible-investor.com/images/uploads/reports/Folksam.pdf, last viewed July 2013.  

  3. Folksam Exclusion lists, last updated May 2013, available at http://omoss.folksam.se/meranforsakring/varaplaceringskriterier/uteslutnaforetag, last viewed September 2013 

  4. Policy clarified in an email from Richard Torgerson, Senior Analyst, Corporate Governance at KPA, received by IKV Pax Christi on 19 August 2013. 

  5. Exclusion list can be found on their website, here: http://www.kpa.se/om-kpa-pension/hallbarhet-och-etik/-vi-utesluter/uteslutna-bolag/, last viewed 19 August 2013. 

  6. Nordea, “Annual report 2012”,p.12, available at http://www.nordea.com/sitemod/upload/root/www.nordea.com%20-%20uk/aboutnordea/csr/RIG_Annual_2012_final_low.pdf, last viewed July 2013. Babcock International Group, BAE Systems, EADS, Finmeccanica, General Dynamics, Huntington Ingalls, Lockheed Martin, Northrop Grumman, Rolls-Royce, Safran, United Technology Corporation. Updated list from personal exchange with Ms. Susanne Gloersen on 28 August 2013. 

  7. Nordea, “Annual report 2011”, p.23, available at http://www.nordea.com/sitemod/upload/root/www.nordea.com%20-%20uk/aboutnordea/csr/Nordea_CSR_2011_ENG_120216.pdf#page=18, last viewed July 2013. 

  8. Swedbank, “annual report 2012”, p.6, available at http://www.swedbank.com/idc/groups/public/@i/@sc/@all/@gs/@corpaff/@pubaff/documents/publication/cid_870253.pdf  last viewed July 2013. 

  9. Swedbank, “annual report 2012”, available at http://www.swedbank.com/idc/groups/public/@i/@sc/@all/@gs/@corpaff/@pubaff/documents/publication/cid_870253.pdf  last viewed July 2013. 

  10. Swedbank, “Position paper Defence Equipment”, available at http://www.swedbank.com/corporate-sustainability/human-rights/position-on-defence-equipment/index.htm, last viewed July 2013. 

  11. Additional information on Swedbank’s policy and its implementation was provided through an email discussion with Amanda Jackson, Human Rights and Sustainability Strategist at Swedbank during August 2013.  

  12. Thomson ONE Banker, “Tearsheet 2779465115”, Thomson ONE Banker (www.thomsonone.com), 3 October 2011; Bloomberg Database, “Loan finder”, Bloomberg Database, viewed November 2011. 

  13. Thomson ONE Banker, “Tearsheet 2614271115”, Thomson ONE Banker (www.thomsonone.com), 8 July 2010; Bloomberg Database, “Loan finder”, Bloomberg Database, viewed November 2011. 

  14. Thomson ONE Banker, “Tearsheets 2755420115 and 2755420115”, Thomson ONE Banker (www.thomsonone.com), 14 July 2011. 

This page contains country specific information from the 2013 Don’t Bank on the Bomb report. It identifies which financial institutions have significant financing relationships with one or more of the 27 nuclear weapons producers.

The financial institutions identified include banks, pension funds, sovereign wealth funds, insurance companies and asset managers. They have provided various types of financial services to nuclear weapon companies. The most important are loans, investment banking and asset management.

All sources of financing provided since 1 January 2010 to the companies listed were analysed from annual reports, financial databases and other sources. The financial institutions which are most significantly involved in the financing of one or more nuclear weapon companies are shown here. See the full report for both a summary and full description of all financial institutions which are found to have the most significant financing relationships with one or more of the selected nuclear weapon companies, by means of participating in bank loans, by underwriting share or bond issues and/or by share- or bondholdings (above a threshold of 0.5% of all outstanding shares or bonds).