

Global pension funds, particularly government sponsored schemes, have started scouring their investments for companies linked to the manufacture of cluster bombs after 111 states signed a treaty last week in Dublin to ban their production.
AP7, the Swedish state pension fund, is one of the latest to declare that it will divest from about 10 companies, including defence and aerospace groups EADS, General Dynamics and Lockheed Martin, although the fund’s decision pre-dated the new ban.
Governments with notable national pension funds that signed the cluster bomb agreement include France, UK, Austria, Finland, Italy and Sweden.
Investors are attempting to compile lists of companies with clear links to the manufacture of cluster bombs. It is understood that a group has approached Jane’s, the defence information provider and consultant, to produce such a reference. The new treaty banning cluster munitions requires the destruction of existing stockpiles within eight years. The final treaty will be opened for signatures in Oslo in early December 2008.State pension funds including the NZ$13.5bn (€6.7bn) New Zealand Superannuation Fund, the €250bn Norwegian Government Pension Fund and the €21.3bn ($32.7bn) Irish National Pension Reserve Fund (NPRF) have already divested or are preparing to pull their money from related companies. Many funds already blacklist producers of landmines as a result of the 1997 Ottawa Convention banning their use. Dutch public pension funds ABP and PGGM sold out of several producers of landmines and cluster bombs last year.
Reinhilde Weidacher, senior adviser at Ethix, the Swedish research company, who served as an expert adviser with focus on responsible investment at the Dublin conference, said: “The draft treaty reads: ‘Each state party undertakes never under any circumstances to: (a) use cluster munitions; (b) develop, produce, otherwise acquire, stockpile, retain or transfer to anyone, directly or indirectly, cluster munitions; © assist, encourage or induce anyone to engage in any activity prohibited to a state party under this convention.”