MARGARET PERIL AND MARGARET BEAVIS Is your super funding nuclear weapons?

Defence and Security

MARGARET PERIL AND MARGARET BEAVIS Is your super funding nuclear weapons?

Oct 25, 2019

Many people have welcomed the widespread divestment from tobacco by superannuation funds, but would be shocked to know their retirement savings are invested in nuclear weapons companies.

In Sydney and Melbourne this week, the “Quit Nukes” nuclear weapon free finance campaign will kick off. Quit Nukes aims to raise awareness amongst superannuation companies and encourage them to no longer invest in nuclear weapons.

Nuclear weapons are designed to devastate citi;es and annihilate those who live there, causing massive civilian casualties.

Most people assume nuclear weapons are the responsibility of governments, yet they are privatised to big companies like Lockheed Martin and Thales.

It is likely some superannuation companies themselves are unaware of their nuclear weapons holdings. Even those companies applying filters that exclude “controversial weapons” usually still have holdings, through their passive investments or through exchange traded funds.

Astonishingly, there is no universal definition for “controversial weapons”, and sadly the “controversial weapons” classification used internationally often does not exclude nuclear weapons. Typically it is limited to cluster bombs, land mines, depleted uranium weapons and armour, chemical and biological weapons.

Quit Nukes is run by the Medical Association for Prevention of War (MAPW), in collaboration with ICAN (Australia). ICAN, the International Campaign to Abolish Nuclear Weapons, was founded by MAPW in Melbourne over a decade ago.

ICAN was awarded the Nobel Peace Prize in 2017, “for its work to draw attention to the catastrophic humanitarian consequences of any use of nuclear weapons and for its ground-breaking efforts to achieve a treaty-based prohibition on such weapons.”

In July 2017 the UN adopted the Treaty on the Prohibition of Nuclear Weapons, which is on track to become international law in 2021. This will make nuclear weapons illegal, just as other treaties have for chemical weapons, biological weapons, land mines and cluster munitions.

The majority of Australians don’t want their superannuation invested in nuclear weapons. Most Australians abhor nuclear weapons; an IPSOS poll last year found 79% of people support Australia signing and ratifying the UN ban treaty.

Globally there are only 18 companies that need to be excluded, according to “Don’t Bank on The Bomb”, an annual report put out last week by PAX in the Netherlands. In Australia these companies represent a very small portion of international portfolios.

Quit Nukes has undertaken a review of the fifteen superannuation funds represented by Industry Super Australia, acting on behalf of over five million superannuation members, (www.industrysuper.com). According to the Don’t Bank on the Bomb 2019 report, not one of these industry superannuation funds feature in their “Hall of Fame” of Nuclear Weapons Free Funds.

Most large Australian superannuation funds are members of the Australian Council of Superannuation Investors, (“ASCI”) which speaks out on environmental, social and governance issues. Some are also members of the Responsible Investment Association of Australia (RIAA). They are also signatories to the UN Principles of Responsible Investing (UNPRI), a vehicle for operationalising the 17 UN Sustainable Development Goals, (“SDG”).

Yet despite all these good intentions, a portion of our retirement savings are still going to nuclear weapons. Of significance here is SDG16 which aims to promote peaceful societies. If superannuation funds wish to take these SDGs seriously, divesting their controversial weapons and nuclear weapons holdings is necessary.

The only Australian superannuation funds fully divested from nuclear weapons are Australian Ethical and Future Super. Bank Australia is also nuclear weapons free.

Divesting from nuclear weapons also makes good business sense. The highly successful Tobacco Free Portfolios campaign has been a significant factor in a global divestment movement from tobacco companies. Recognition of the huge harms coming from tobacco has seen financial institutions, including superannuation funds, pension funds, banks, insurance companies divest of their tobacco holdings resulting in significant reduction in stock valuations of tobacco companies.

It is encouraging to see large index providers such as Vanguard and Blackrock recently establishing investment options that very clearly exclude companies involved in the production of nuclear weapons. This will make the choices for fund managers easier.

Well-meaning investment policies that exclude “controversial weapons” are no longer acceptable on their own – the devil is in the detail. Profiting from “Weapons of Mass Destruction” is not OK.

Superannuation companies need to explicitly exclude nuclear weapons, and tell their investors.

Divesting from nuclear weapons is part of a global movement to make the world a safer place, and an important step towards the total abolition of the world’s worst weapons.

Margaret Peril is a retired academic, company director and finance executive.

Margie Beavis is a Melbourne GP. She is vice president of MAPW and co-chair of ICAN (Australia)

Directors Quit Nukes