Controversial weapons vs the SDGs

The Sustainable Development Goals, adopted in 2015 by the United Nations, have become the first globally agreed sustainability framework. Since their adoption, they are used to help mobilize resources to achieve 17 goals ranging from ending poverty to climate action and peace and justice. Taking the SDGs seriously also means recognizing that divestment from controversial weapons is a necessary step in achieving the goals, and in particular SDG16.


Many financial institutions and related organizations such as the UNPRI have started to operationalize the SDGs and investigate how it can guide investment practice and policy. The 17 goals and their many sub-targets offer great tools for investors to identify where and how they can increase their positive impact. This is important, because buy-in from the private sector is crucial in achieving the goals. The UN Commission on Trade and Development estimated that US$5 to US$7 trillion in investments will be needed every year from 2015 tot 2030 to realize the goals.

But investors themselves also have an interest in the achievement of the goals. Not meeting the goals set out in the SDGs will have a negative impact globally and thereby also constitutes a financial risk, especially for so-called universal owners. In other words, “failure to achieve the SDGs will impact all countries and sectors to some degree, and as such create macro financial risks”.[1] Conversely, achievement of the SDGs will have a significant positive impact on sustainable economic growth around the world, which is an important enabler for investors to achieve their own objectives and returns.[2] In short: investments that do not contribute to or even undermine the SDGs constitute a long-term financial risk for the economy as a whole.

The divestment case for SDG16

One of the SDGs that has not attracted as much interest from the investment community as some others is SDG16, which focusses on peace, justice and inclusive institutions. The Dutch Working Group on Sustainable Finance even said in a 2017 paper that SDG16 is “not directly investible”.[3] However, by making sure they do not invest in producers of controversial weapons, investors can actually make a real contribution to SDG16.

SDG16 aims to “Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels”. Some of the sub-targets of the goal are to “significantly reduce all forms of violence” and to “substantially reduce corruption and bribery”.[4]

Controversial weapons can be broadly defined as indiscriminate weapons that cause disproportionate human harm and are often prohibited by international treaties and conventions. The concept is generally understood to cover at least anti-personnel landmines, cluster munitions, biological and chemical weapons and nuclear weapons. Following from their humanitarian consequences as well as their broad rejection by the international community, it is clear that their development, production and use does not contribute to the achievement of peace and justice. In addition, the defense industry is one of the sectors that is most vulnerable to corruption and malpractice.

It follows that investing in companies whose products fundamentally undermine the letter and spirit of the SDGs contributes to the macro financial risks that are expected to materialize if the SDGs are not met. Investors who want to contribute to achieving the SDGs rather than undermining them, should therefore make sure they divest from the companies that produce controversial weapons and put in place comprehensive policies preventing all such investments in the future.



[1] PWC, “The SDG Investment Case”, 2017, available at, viewed 17 September 2019.

[2] UNPRI, “Investors and the Sustainable Development Goals”, 12 October 2017, UNPRI website (, viewed 17 September 2019.

[3] Sustainable Finance Platform, “SDG impact indicators”, 2017, page 10,, viewed 17 September 2019.

[4] United Nations, “Sustainable Development Goals”, United Nations website (, viewed 18 September 2019.

written by

Maaike Beenes works for the humanitarian disarmament program for PAX in the Netherlands. She researches investments by financial institutions in producers of controversial weapons, notably nuclear weapons and cluster munitions, and is co-author of the reports ‘Don’t Bank on the Bomb’ and ‘Worldwide Investments in Cluster Munitions’. As part of the Don’t Bank on the Bomb campaign of PAX and ICAN, she works together with campaigners around the world to hold banks and other investors accountable for their investments in nuclear and other controversial weapons. She was involved in the negotiations for the Treaty on the Prohibition on Nuclear Weapons on behalf of PAX and ICAN.
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