Don’t listen to the Naysayers: momentum for nuclear weapons divestment is growing

Treaty on the prohibition of nuclear weapons

22 January 2022 marked the first anniversary of the entry into force of the UN Treaty on the Prohibition of Nuclear Weapons (TPNW) (United Nations n.d.). Statements of civil society organizations and individuals around the world marked this anniversary with calls for other countries to join the treaty (WILPF 2022), and on 21 January 2022, the mayor of Hiroshima called for policymakers to ‘take radical shifts in policy towards nuclear abolition, liberated from the nuclear deterrence theory’ (Matsui 2022).

The need for shifts in policy has become more urgent since the war in Ukraine commenced a month later. The world has not been this close to nuclear war since the Cuban Missile Crisis of 1962 (IPPNW 2022).

The TPNW complements the Non-Proliferation Treaty in its calls for the elimination of nuclear weapons (Joyner 2018). Importantly, however, the TPNW specifically prohibits assistance in developing nuclear weapons. The prohibition of assistance is generally accepted to include financing (NPA n.d. and ICRC 2019).

In Article 1(1)(e) of the TPNW, States Parties undertake never under any circumstances to ‘assist, encourage or induce, in any way, anyone to engage in any activity prohibited to a State Party under the Treaty’ (United Nations n.d.).

Ten years previously in the introduction to the first ‘Don’t Bank on the Bomb’ report issued by the International Campaign to Abolish Nuclear Weapons (ICAN), Desmond Tutu of South Africa wrote:

Divestment was vital in the campaign to end apartheid in South Africa. Today, the same tactic can – and must – be employed to challenge man’s most evil creation: the nuclear bomb. No one should be profiting from this terrible industry of death, which threatens us all.

(DBOTB 2012, 4).

Divestment

Divestment has been defined as follows by the British Medical Journal (BMJ): ‘Divestment is the opposite of investment. It is the reduction or … the complete removal of stocks, bonds, or investment funds that are unethical because of the harm to health’ (Abbasi and Godlee 2020).

The potential for severe harms to health from nuclear weapons is well documented. There would be no possibility for any meaningful medical response to even one nuclear weapon exploding over a city. Extended nuclear war would risk the survival of our species (Ruff 2022, 5–17).

According to the Oxford Research Encyclopaedia (cited in scientistswarning.org 2020), ‘divestment is a socially responsible investing tactic to remove assets from a sector or industry based on moral objections to its business practices’. As mentioned above, it has historical antecedents in the anti-apartheid movement in South Africa. The early-21st-century fossil fuel divestment movement began with climate activist and 350.org co-founder Bill McKibben calling for divestment (McKibben 2018). In 2018, the same year as the fossil fuel divestment movement began, Drs Macintyre, Orgel and other Medact Scotland members in a letter to the BMJ contended that arms and nuclear arms need to be included as appropriate targets for divestment (Macintyre et al. 2020).

It has been argued that divestment campaigns such as the anti-apartheid movement call for divestment from South Africa and the calls for fossil fuel divestment have no real economic impact (scientistswarning.org 2020). However, these divestment campaigns clearly contributed to stigmatizing apartheid and continue to help stigmatize fossil fuels (MacAskill 2015; McKibben 2018).

Furthermore, advocates for divestment from apartheid in South Africa, divestment from fossil fuels, and the Boycott, Divestment, Sanctions Movement (BDS) have never accepted the argument that investment is apolitical, contending investing implies support. Those who argue that fund managers have a fiduciary duty to exclude all non-financial considerations from their investment decisions do not regard the impact on a moral compass as relevant. However, while commentators like CBC News have said that we must ‘keep in mind, divestment has never really affected its targets’ bottom lines (for example, South Africa’s economy didn’t suffer)’ … nevertheless the same source acknowledges that ‘divestment was part of the chorus of arguments that came together to end apartheid’ (Ram 2018).

Advocates for divestment assert that ‘not divesting is not a politically neutral act – it is, in fact, choosing the side of fossil fuel corporations. Therefore, they argue that not politicizing this issue would be unethical’. Every day how we spend money impacts the planet and the political sphere (Oxford Research Encyclopaedia, cited in scientistswarning.org 2020).

Don’t Bank on the Bomb

It is widely accepted that financing is a form of assistance contributing to the production of nuclear weapons and following the adoption of the TPNW in 2017 it is now in violation of international humanitarian law for those countries that have signed the treaty to do so (Docherty and Mei 2019; Future of Life Institute 2017).

Don’t Bank on the Bomb (DBOTB) is a joint project of ICAN and PAX: a nuclear weapons divestment campaign which was launched before the TPNW negotiations commenced and supported activity to achieve the treaty. Since the treaty was adopted at the UN in 2017 and its subsequent entry into force in 2021, DBOTB has ‘focused on stigmatizing the provision of financial assistance to private entities involved in development, testing, manufacture, or production of nuclear weapons’ (Docherty and Mei 2019).

Two recent reports (Perilous Profiteering and Rejecting Risk) published by ICAN and PAX in the weeks running up to the TPNW entry into force first anniversary (22 January 2022) highlighted the latest gains of the nuclear weapons divestment movement (ICAN and PAX 2021, 2022).

The first report Perilous Profiteering found that fewer financial institutions were investing than in the previous year’s analysis (ICAN and PAX 2021, 4). In the 25 companies known to be involved in nuclear weapons production, manufacture or development, there were ‘significant drops’ in the values of shareholder investments.

The report analysed available data from companies involved in producing, manufacturing or developing nuclear weapons located in six of the nine nuclear-armed countries (India, Russia, China, France, the United Kingdom and the United States). These activities of these companies are now prohibited under international law. More than 200 billion USD in contracts were identified (although the amount is likely to be higher as many contract details are not published). Producers in Russia and China were included for the first time in DBOTB reports because companies there are newly engaged in global financial activities such as financing debt via loans and issuing bonds.

The reports showed a decrease of 63 billion USD, from the 748 billion USD invested in nuclear weapons in the 2 years ending January 2018 (PAX 2019) to 685 billion USD in the two and a half years ending July 2021 (ICAN and PAX 2021). A notable drop in the number of financial lending institutions and a quick perusal of stock holdings showed a decreasing willingness and increasing risk aversion to investing in producing nuclear weapons (ICAN and PAX 2021).

Following nuclear weapons prohibition, the industry is changing

Although it is early days in assessing the ultimate impact of the TPNW on the nuclear weapons industry, the industry has begun to change.

One recent case history shows that divestment (or intention to divest) can be an effective tool. Serco Group plc is a British company which had been part of the consortium managing AWE Management Ltd., a facility responsible for designing, managing and maintaining the UK’s nuclear warheads. It was forced to drop its plans to bid for contracts at the UK’s Atomic Weapons Establishment (AWE) subsequent to investors threatening to sell their shares. Fund managers warned Serco that working with nuclear weapons might result in them being forced to drop Serco shares due to non-compliance with Environmental, Social and Governance (ESG) standards. This suggests that ‘investors are adhering to the international norm against nuclear weapons that was established by the Treaty on the Prohibition of Nuclear Weapons, despite that the fact that the UK is not party to the treaty’ (DBOTB 2021), and that investing in nuclear weapons is a risky choice for investors, a risk increased by the regulatory stipulations included in the TPNW.

Prior to the Ukraine–Russia war, the weapons industry had been shrinking, with companies either merging (United Technologies and Raytheon) or being acquired by others (Northrop Grumman has acquired Orbital ATK). It is easier for investors to enter into or exit from relationships with a smaller number of contractors in the industry, in order to divest or exclude them from investments, rather than having to pursue a much larger number of these ‘contributors to catastrophic threats’ (ICAN and PAX 2021, Executive Summary, 7).

Some financial institutions have made new investments in nuclear weapons; however, these are mostly in countries that have not yet joined the TPNW. Significantly, more than 100 financial institutions have divested; several of these are from states that have joined the treaty including Allied Irish Bank and Bank of Ireland (the Republic of Ireland) and Investec (South Africa) (ICAN and PAX 2021).

Financial institutions that continue investing in companies building nuclear weapons face regulatory risks in addition to reputational risks as more countries join the TPNW. The countries that have signed the TPNW commit to not manufacturing or taking part in the financing of nuclear weapons and their participation increases the stigma connected to these weapons and those that invest in them. This may mean that companies continuing to work on banned weapons will experience reputational damage affecting profitability and share values. This would also impact on the reputation of their investors (DBOTB Scotland, 1.3 n.d.).

As the sustainability market grows significantly, the requirement for ethical considerations as well as fiduciary ones grows in tandem (ICAN and PAX 2021, 112). Customers and shareholders are increasingly concerned about environmental impacts, particularly destructive environmental impacts, and reducing harm, not only about making money. Protecting their children and the rest of society from the other existential threat of nuclear weapons requires ending production and financing of the weapons (ICAN and PAX 2021).

Increasing numbers of financial institutions are citing the Treaty on the Prohibition of Nuclear Weapons (TPNW) as one reason for excluding these weapons of mass destruction from investment policies. Before the TPNW was negotiated, 54 known policies that had done this were included in the 2016 DBOTB report, this increased to 77 after the Treaty was adopted and has gone up to over 100 since the Treaty has gone into effect (ICAN and PAX 2022).

In countries that have nuclear weapons and resist calls to adopt the TPNW, campaigning for divestment from nuclear weapons and their delivery platforms provides an opportunity to express dissatisfaction with the policies of those states. There is increasing awareness of possible alternative uses of public resources if they are no longer invested in weapons of mass destruction (ICAN and PAX 2021).

Impact of war between Russia and Ukraine and a campaigning case study

Since the invasion of Ukraine, many have experienced nuclear anxiety for the first time in their lives or since the end of the Cold War (ICAN n.d.).

Mathew Gault suggests ‘Just don’t panic. And don’t forget what you’re feeling right now. Learn about nuclear weapons. Learn about the activism around them. There are people actively fighting right now to dismantle them all. They’re always looking for new people to join the fight so, one day, we can lick the bomb and live in a world free of the threat of cleaning nuclear fire’ (Gault 2022).

Groups such as Don’t Bank on the Bomb Scotland and ICAN which campaign for divestment contend that such campaigning can help to ameliorate these feelings of nuclear anxiety by acknowledging that nuclear war has not yet happened and that those working to abolish nuclear weapons always welcome more to join them.

Case study: #changenatwestcampaign

The #ChangeNatWest campaign is a current and ongoing nuclear weapons divestment campaign developed by a partnership between Don’t Bank on the Bomb Scotland and ICAN (ICAN 2022). The goal of the campaign is to encourage NatWest Group to exclude all companies involved in weapons that ‘cause mass, indiscriminate and long-lasting damage’. The bank’s defence sector investment policy excludes any investment in companies connected to landmines and cluster bombs, and the #ChangeNatWest campaign (Figure 1) urges the group to include nuclear weapons in the same prohibited category. In 2021 over 40 different organizations (including ICAN, IPPNW, CND, Medact and Medact Scotland, Unison Scotland) signed a letter to the NatWest Group CEO to update the group’s defence sector policy to reflect that nuclear weapons are now prohibited under international law (ICAN 2022, 2022a).

Figure 1. Day of action #changenatwest Twitter campaign example.

Note: NatWest Group won’t invest in cluster bombs and landmines. Now that the group is reviewing its defence sector policy, tell them it’s time to add all nuclear weapons to that list (#ICANDIVEST 2022).

A #ChangeNatWest day of action including both online and physical demonstrations around Scotland was successfully organized. A high turnout involving many groups showed an increased level of concern following Russia’s nuclear sabre rattling. Letters to bank managers were submitted at multiple branches around Scotland. The Glasgow newspaper The Herald had published an Agenda article about the NatWest Group policy the previous year (Fihn and Orgel 2021). Following the day of action, The Herald published a letter which again highlighted the need for NatWest to change its defence sector weapons investment policy, especially in the light of the fact that

the UK still clings to an outdated, unproved and dangerous theory of nuclear deterrence. This extremely expensive theory has allowed Putin to invade Ukraine and commit war crimes with impunity. Now the risk of nuclear war is the highest its been since the cold war and our very existence is under threat (Orgel 2022, 25).

At the time of writing, the Russia–Ukraine war continues. It is clear that weapons made to destroy cities and cause mass murder of civilians cannot be assumed to prevent war. This war might be viewed as a proxy war which in no way lessens the risks of escalation.

Nuclear deterrence might stop nuclear-armed countries from directly engaging in war with each other, just as it might stop proxy wars from escalating and spreading to the North Atlantic or the Pacific. But it is equally possible that nuclear deterrence has caused war and enabled national leaders to act with impunity. Nuclear weapons have certainly not stopped Russia from waging aggressive war against Ukraine

(Slaughter and Snyder 2022).

In the light of threats such as those highlighted above, further divestment is needed to advance the goals of humanitarian disarmament to prevent nuclear arms-inflicted suffering. The DBOTB (2021) report mentioned above found that ‘338 financial institutions made 685 billion USD available to 25 nuclear weapon producing companies from China, France, India, the Russian Federation, the United Kingdom and the United States’ (ICAN and PAX 2021). These are the companies with vested interests to continue nuclear arms races. It is likely that these companies and the international arms industry in general view the current Russia–Ukraine war as a profit-enhancing opportunity. For example, ‘Britain’s biggest defence contractor BAE Systems expects to benefit from increased government spending on defence as geopolitical tensions mount after Russia’s invasion of Ukraine’ (Pfeifer 2022).

We need to ‘follow the money’ to learn the reality of nuclear weapons production. ‘It is only by knowing those who seek to maintain the status quo that we can engage and shift their behaviour’ (ICAN and PAX 2021).

Unfortunately, the situation has worsened since 2020 (ICAN 2021). In 2021, before the Russian invasion of Ukraine, 9 nuclear armed states spent 82.4 billion USD on nuclear weapons, an increase of 6.5 billion USD from 2020. These immoral levels of spending on weapons of mass destruction by nuclear-armed states were made despite the fact that the majority of countries in the world support banning these weapons.

This spending failed to deter a war in Europe and squandered valuable resources that could be better used to address current security challenges, or cope with the outcome of a still raging global pandemic. This corrupt cycle of wasteful spending must be put to an end.

(ICAN 2022a, 4).

At the time of writing the first meeting of States Parties to the TPNW had recently taken place in Vienna 21–23 June 2022 (ICAN n.d.b). Because of increasing profits that nuclear arms manufacturers reap from governments, it is now more important than ever for investors to realize the need to prioritize the moral compass of their investments to counteract the world’s current indecent and dangerous increase in nuclear arms expenditure. On a hopeful note, for the first time a financial institution (Etica Funds, the asset manager for Italian Banca Etica) contributed a sign-on statement to the First Meeting of States Parties (1MSP) of the TPNW. The statement representing 230 billion euros under management referred to state responsibilities and at the same time reinforced the increasing role for the financial sector to help bring about a nuclear weapons free world (#ICANDIVEST 2022).

There is hope that there will be a renewed impetus to finally abolish nuclear weapons (Slaughter and Snyder 2022). Most of the world’s countries want these weapons gone. Investing in sustainable life-enhancing activities instead would make a clear statement opposing weapons of mass destruction and the realistic possibility of extinction-level events these weapons present.

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No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Michael Orgel

Michael Orgel is a long time member of Medact Scotland and Medact. He has an MD degree from Case Western Reserve University School of Medicine, Cleveland, Ohio, USA. He is a founding member of the Don't Bank on the Bomb Scotland network. His first clinical post was Chief of Medical Services at Haight-Ashbury Free Medical Clinic Drug Detox and Aftercare Project, San Francisco. Before retiring from clinical practice he served as consultant to the Edinburgh Community Drug Team and Edinburgh Harm Reduction Team