Canadian financial institutions announce ban on cluster munitions investments

NEI Investments and Desjardins Investments (Canada) announced they have banned investments in cluster munitions producers. Both financial institutions already had cluster munitions policies in place for specific funds and have now extended that exclusion to all products, according to the financial companies.

The Cluster Munition Coalition (CMC) welcomes this announcement. A comprehensive ban on investments in cluster munition producers by Desjardins Investments and NEI Investments would be a very positive outcome of Canada’s statement that it considers investment in cluster munitions to be prohibited.

In November 2014, Canada passed legislation implementing the 2008 Convention on Cluster Munitions (CCM). The CCM bans the use, production, stockpiling and transfer of cluster munitions. Although Canada’s implementation legislation does not contain a specific prohibition on investment in cluster munitions, the government has on several occasions reiterated the view that investment is considered prohibited under the bill.

John Kearns, CEO of NEI Investments, said in a press release that: “The implications of the new cluster munitions act have not been widely discussed in the investment industry, but […] we want to demonstrate how you can exclude these weapons […]. We will also be engaging companies on joining this worldwide effort as part of our 2015 corporate engagement Focus List.”

“This is encouraging”, says Firoz Alizada, Campaign and Communications manager with the CMC. “We applaud such a pro-active outreach to other investors. To achieve a world free of cluster munitions, it is imperative that also financial institutions take their responsibility and ban all types of investments in companies that produce these prohibited weapons. Not a penny should go to companies involved with cluster munitions.”

The 2014 report “Worldwide Investments in Cluster Munitions; a shared responsibility”, authored by CMC-member organisation PAX (the Netherlands) shows that 151 global investors invested US $27 billion in the seven cluster munitions producers identified in the research. Two of these financial institutions are from Canada.

“Investments in cluster munitions producers are inexcusable. Canadian financial institutions need to once and for all end their financial involvement with companies that produce these abhorrent weapons,” says Erin Hunt from Mines Action Canada (MAC). She adds: “We commend those financial institutions taking action and ask their peers to do the same by introducing policies to ensure they are not supporting companies involved in the production of these illegal weapons.”

Next to documenting investments, the ‘Worldwide Investments in Cluster Munitions; a shared responsibility’ report also looks at ‘best practices’. Thirty-six financial institutions with comprehensive policies banning all types of investments are listed in the so-called Hall of Fame. Another 40 financial institutions that have cluster munitions policies in place, but that contain certain loopholes, are listed in the ‘runners-up’ category. NEI Investments and Desjardins Investments’ policies will be researched for the next report update to assess if they merit the institutions a place in the Hall of Fame.

Interested to know more about investments in cluster munitions producers? Watch the 1-minute animation here: