German ESG research firm Oekom has published a report showing that around 250 listed companies are likely to be involved in the manufacture of “outlawed” or “controversial” weapons and that several are based in France, Germany and the UK – countries that have signed treaties banning the weapons.
In its report, Oekom defined “outlawed weapons” as those that are banned outright by international treaty. These are cluster bombs, biological and chemical weapons as well as anti-personnel mines. “Controversial weapons” are, according to Oekom, atomic bombs, weapons with depleted uranium and even cluster bombs with fewer explosives.
The greatest number of firms (49) which Oekom believes to be involved with outlawed or controversial weapons is in the US, which has not signed up to the treaties banning cluster bombs or anti-personnel mines.
As a result, US firms like Alliant Techsystems, L-3 Communications and Textron are often excluded by responsible investors.But Oekom also said it suspected that 16 companies in France were involved with the weapons as well as 11 in both Germany and the UK. All three countries have embraced the international bans. Although the report did not disclose the names of any of the companies, an Oekom spokesman did notify Responsible Investor of one example: German defence firm Rheinmetall, which is indirectly involved in the “controversial” version – that is less explosives – of cluster bombs.
Other countries that, according to the report, are home to outlawed or controversial weapons manufacturers include Russia (14 firms), China (11), Israel (11), India (9), Poland (9), Romania (8), South Korea (7) and Egypt (6).
Oekom said: “Many investors today steer clear of manufacturers of outlawed and controversial weapons. Yet since companies are generally not transparent about what controversial things they may be producing, it’s a huge challenge for investors to identify what to avoid.”