Untenable Investments

Update 30 May 2024: 
A data error has come to light in the previously published version of “Untenable Investments” released on 21 February 2024. Specifically, the dataset provided by PAX’s data provider, Profundo, contained errors that showed $41.9 billion more in loans and $24.6 billion more in underwriting than it should have. See also the statement by Profundo in this regard. The report available for download below is an updated version that provides corrected values for all loans and underwriting services. The corrections did not involve removing from or adding financial institutions to the report. Where necessary, the text below has been adjusted to reflect the corrected values.  

The report “Untenable Investments: Nuclear weapon producers and their financiers” is a joint publication of PAX and ICAN. As shown in the report, between January 2021 and August 2023, 287 financial institutions had significant financing or investment relations with nuclear weapon producers, down from 306 institutions in previously published results.

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The report examines in detail the involvement of 24 companies in the production, maintenance or modernization of nuclear weapons. These companies contribute to the nuclear arsenals of China, France, India, the Russian Federation, the United Kingdom and the United States.

The financial institutions with significant financing or investment relationships with one or more of the 24 nuclear weapon producers are also listed. Together, investors held $477 billion in shares and bonds in these companies, $276 billion was provided in loans and underwriting.

The 24 companies fully profiled in the report are involved in activities that are outlawed under the Treaty on the Prohibition of Nuclear Weapons (TPNW), which entered into force in 2021. More than $336 billion in contracts for such activities were identified, though the true number is likely much higher since many companies do not publish contract details. Northrop Grumman and General Dynamics are the biggest nuclear weapons profiteers, with outstanding contracts with a potential value of at least $21.2 billion and $23.7 billion respectively, not including the consortium and joint venture revenues. BAE Systems, Boeing, Lockheed Martin and RTX also hold multi-billion-dollar contracts for nuclear weapon production and/or sustainment.

The report’s findings saw a $15.7 billion increase in share and bond holding values from the 2022 “Risky Returns’’ report. There was, on the other hand, a $9.4 billion drop in loans and underwriting. For the third year in a row, the number of institutions identified with substantial financial links to the nuclear weapon producers has dropped. Despite government encouragement to invest more in arms producers, many financial institutions have stuck to their policy of excluding these companies, often based on ethical concerns over their involvement in production of weapons of mass destruction.

Financial sector leverage

For companies that build the key components needed to maintain and expand countries’ nuclear arsenals, access to private funding is crucial. As such, the banks, pension funds, asset managers and other financiers that continue to invest in or grant credit to these companies allow for the production of inhumane and indiscriminate weapons to proceed. By divesting from their business relationships with these companies, financial institutions can reduce available capital for nuclear weapon related activities and thereby be instrumental in supporting the fulfilment of the TPNW’s objectives

The human rights and environmental risks attached to nuclear weapons are severe and irremediable. Financial institutions are uniquely placed to support efforts that seek to achieve a world free of the nuclear threat.

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30 May 2024