Germany: Greens call for sustainable investment fund standards

Study finds most funds invest in arms industry

A new study commissioned by the Green parliamentary group in Germany has found that nine of 10 sustainable investment funds surveyed are invested in the arms industry, prompting calls for minimum standards for sustainable investments.

The funds evaluated were: Dexia Sustainable World, DNB Global SRI, Liga Pax Cattolico Union, Öko-Aktienfonds, Ökoworld Ökovision Classic, Pioneer Funds – Global Ecology, Postbank Dynamic Vision, Sarasin Oekosar Equity, Swisscanto Green Invest Equity and Triodos Sustainable Equity Funds.

The report found they all have stakes in both the nuclear energy and oil and gas industries.

The study’s author, Jochen Bettzieche, stressed that the sampling was not representative of the sustainable fund industry as a whole. The report has had wide coverage in the German media.

The study found that only the Ökoworld product was not invested in the arms industry, which he defined as the manufacturers and their suppliers.

The sustainable fund with the greatest exposure was from Postbank with 25 such companies.A notable holding was EADS, a maker of fighter jets and helicopters as well as missiles. Dexia’s product came in second with 14 investee firms in the industry.

All the funds had some exposure to the nuclear industry, including uranium producers, reactor builders and operators or waste managers. Yet only five funds held shares in companies that owned nuclear reactors, and in the case of two funds – Triodos and DNB – it was only one firm. The Dexia and Postbank funds, meanwhile, had the greatest exposure to nuclear reactors, with 11 companies each. Germany is to scrap nuclear power as a power sources from 2020, while greatly increasing reliance on renewable energy.

In terms of oil and gas companies, the Dexia and Postbank products again had the greatest exposure, with 64 and 57 firms respectively. The fund with the least exposure was from Ökoworld with just five firms.

The Greens said the study showed that the definition of “sustainable investments” was arbitrary.

“As a result, the products are obscure and do nothing other than confuse investors,” it said. Gerhard Schick, the Greens’ finance spokesperson, has therefore called for the legal introduction of minimum standards for sustainable investments.