When researching Don’t Bank on the Bomb, we find many financial institutions that have a policy to not invest in nuclear weapons, or not invest directly in the production of nuclear weapons. These institutions make it a point to not exclude nuclear weapons companies as a whole, but supposedly they can only exclude the parts of companies related to nuclear weapons. They often even say they received confirmation from the nuclear weapons companies that their money will not be used to produce nuclear weapons.
Of course, we commend these financial institutions for recognizing nuclear weapons for what they are: weapons of mass destruction and unacceptable investments. Still, this is not good enough.
There is no way to prevent a company from reallocating money once its been invested. Adding stipulations to a general corporate loan that restricts the company from using that money to produce nuclear weapons, or financing only a company’s civilian projects still frees up other funds for nuclear weapons production. As with all financing relationships, when earmarked monies come in, the money that’s not specifically designated can and is reallocated elsewhere. The only way to make sure the investments do not facilitate the production of nuclear weapons or key components of nuclear weapons is to exclude the company as a whole.
The whole point of excluding nuclear weapon producers is to create an incentive to stop producing nuclear weapons. If the producing company is excluded by enough financial institutions, it will not have access to the funds it needs and will be compelled to change. Excluding only the direct production of nuclear weapons does not create enough pressure to achieve that goal. Compare it to child labour: if a factory uses child labour to produce shoes, should only the product line that those children worked on be excluded by shoe stores, or should shoe stores stop buying shoes from that factory altogether until it stops all child labour? Logically, only excluding the factory as a whole would put enough pressure on it to change.
In addition, financial institutions invest to make a profit. A company making nuclear weapons might return a good profit, but if they do, they cannot guarantee that the profit might be partially from their nuclear weapons business. Financial institutions investing in nuclear weapon producers are making a profit from the production of weapons of mass destruction.
No financial institution wants to be linked to weapons of mass destruction. By arguing they are only financing the civilian parts of a nuclear weapon producers, financial institutions try to distance themselves from a thorny issue. But they cannot deny that they are still supporting and making a profit from a company that make nuclear weapons.