What can financial institutions do

Financial institutions should develop policies that exclude all financial links with companies involved in production of (key components of) cluster munitions.

When developing your financial institution’s policy, it is important to make sure that:

  • the policy applies to the entire group of companies that your financial institution is part of;
  • the policy and/or a summary of it is made publicly available;
  • the policy comprehensively excludes investment in cluster munition producers:
    • all type of cluster munitions producers should be included;
    • any and all activities of the cluster munitions producers should be covered by the policy;
    • without exceptions, all types of financing or investment should be covered.

All investments should be covered

Because all investment facilitates this production, no exceptions should be made for any type of investment. This includes third party financial services, funds that follow an index or civilian project financing for a company also involved in cluster munitions.

Inform the cluster munition producers of your decision

Furthermore, financial institutions should inform producers of their decision to end investment because of the company’s involvement with cluster munitions. Financial institutions can set clear deadlines with a limited time frame within which a company must cease production of cluster munitions if it wishes the disinvestment decision to be reversed. When a company persists in producing cluster munitions after the deadline, the financial institution will disinvest. New applications for investment will be declined until the company has halted all activities related to the production of cluster munitions.

Good examples

Fortunately, more and more financial institutions have acknowledged that cluster munition producers are not ethical or viable long-term business partners, and have installed a public policy to end investments in these companies. There are dozens of financial institutions worldwide that have set the stage by developing good examples of comprehensive policies. Any financial institution in the Hall of Fame will be glad to inform you on how to develop and implement such policies. The Stop Explosive Investments team is also very willing to provide you with any information you might request via info@stopexplosiveinvestments.org