Investment Group Calls on Indexes to Remove Makers of Controversial Weapons
February 11 2019 - 11:36AM
Dow Jones News
By Maitane Sardon
More than 140 asset managers, asset owners, wealth managers and
service providers representing $6.9 trillion in assets have called
on index providers to remove the manufacturers of certain types of
"excessively harmful" weapons from major indexes.
In an open letter, investment association Swiss Sustainable
Finance highlights the problems for investors focused on social
issues of including the makers of controversial weapons, such as
anti-personnel mines, in indexes. The letter was sent to
representatives of the FTSE Russell (FTSI), Morningstar (MORN),
MSCI (MSCI) and S&P Dow Jones (SPGI) indexes.
Swiss Sustainable Finance defines controversial weapons as those
that are most frequently identified by responsible investors as
weapons that have been subject to widespread bans or restrictions
by international agreements.
"The financial industry is in a position to make a huge
difference to responsible investing, and that should include making
funding less easily available for such companies," the investors
said.
Investing in the makers of controversial weapons--which include
biological and chemical weapons, cluster munitions, anti-personnel
mines or nuclear weapons--goes against some national regulations
and international conventions. However, some mainstream indexes
continue to include them.
This causes a problem for passive investors whose strategies
typically replicate an index and can't screen out weapons makers.
For active investors, implementing the exclusions means subjecting
portfolios to further scrutiny at additional cost, Swiss
Sustainable Finance said.
"Aligning investor portfolios to established values and norms is
becoming the new normal for pension funds and other institutional
investors," said Sabine Doebeli, CEO at Swiss Sustainable
Finance.
As of Feb. 7, the letter had 143 signatories, including ABN Amro
Bank NV (ABNBK.YY), DWS Group (DWS.XE)and Man Group plc
(EMG.LN).
Write to Maitane Sardon at maitane.sardon@dowjones.com
(END) Dow Jones Newswires
February 11, 2019 11:21 ET (16:21 GMT)
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