Dire, fare, disarmare: Etica Funds and ICAN on the frontline against war

Dire, fare, DISARMARE[1]. Ethical finance puts humans and the planet in which we live at the centre of economics, finance and business. Moreover, it means reformulating financial ends and means to create economic value to grow the common good.

Etica Funds says no to all weapons

In light of the recent conflicts that are affecting more and more countries around the world, is important that investors say NO to nuclear weapons and NO to the production, distribution, possession and use of nuclear weapons, promoting the commitment to victim support and environmental remediation. In choosing where to make their investments and place their savings, investors and savers alike can guide and push governments towards more meaningful decisions on nuclear weapons”.

Marco Carlizzi, Chairman of Etica Funds

luca mattiazzi etica funds

“Disarmament is a very important topic for Etica Funds – defining, even. Our mutual funds have refused to deal with weapons manufacturers since they were established in 2003. Thanks to our ethical approach to finance, we are actively contributing to one of the founding principles of the Italian Constitution: “Italy rejects war as an instrument of aggression against the freedom of other peoples and as a means for the settlement of international disputes” (Art. 11).

Luca Mattiazzi, General Manager of Etica Funds

Ethical finance has always stood against the proliferation of weapons. Etica Funds excludes nuclear, controversial and conventional weapons from the funds in which it invests. Specifically, the following categories are excluded from Etica Funds’ investment funds:

  • companies whose turnover derives from the manufacture of conventional weapons, their specific or generic components, or other products or services intended for military use;
  • companies involved in the development, production, use, maintenance, distribution, storage, transport or sale of controversial weapons or key parts of controversial weapons (anti-personnel mines, cluster munitions, chemical weapons, biological weapons, nuclear weapons, non-detectable fragments, incendiary devices, blinding laser weapons, white phosphorus munitions, depleted uranium).

The “Don’t bank on the bomb” report launched by ICAN and the Dutch NGO Pax places Etica Funds in the “Hall of Fame”, the list of businesses that do not invest in nuclear weapons producers.

ICAN – Nobel Peace Prize winner and commitment to nuclear disarmament

Etica Funds collaborates with ICAN (International Campaign to Abolish Nuclear Weapons), a Swiss organisation that in 2017 was awarded the Nobel Peace Prize for its “work to draw attention to the catastrophic humanitarian consequences of any use of nuclear weapons.”

premio nobel per la pace

ICAN is a non-governmental organisation founded in 2007, registered in Geneva. Its Italian partners are Senzatomica and Rete Disarmo. The mission of ICAN is to mobilise civil society across the world to support the specific objective of negotiating a global nuclear weapon ban treaty.

Dire, fare, DISARMARE

Activities and companies associated with armaments and businesses with links to the production and trade of weapons have always been excluded from the investment funds of Etica Funds. We firmly believe that disarmament and the promotion of a culture of dialogue can help to find new ways to resolve international disputes at risk of becoming a pretext for war.

Moreover, for many years we have directed our dialogue with our partner companies with a view to incorporating our focus on arms – and in particular on weapons of mass destruction such as nuclear weapons – into the policies adopted by other financial operators.

Why are nuclear weapons an important topic?

susi sneyder ICAN

Susi Snyder, Financial Sector Coordinator of ICAN, responds. “Nuclear weapons have unacceptable humanitarian consequences and the risk of their use is growing. Moreover, they are the most destructive, inhumane and indiscriminate weapons ever created. The risk of nuclear weapons being deployed continues to grow and can be eliminated only by an outright ban.

In 2020, nuclear-armed states spent $72.6 billion on their nuclear arsenals. All nuclear-armed states are developing the quality and technology of their arsenals. Of these, six – China, India, North Korea, Pakistan, Russia and the United Kingdom – are also increasing their stockpiles.”

What is the goal of the initiative?

“We want countries to eliminate and ban nuclear weapons through the only international treaty designed to do so,” Susi Snyder declares. The Treaty on the prohibition of nuclear weapons (TPNW) was adopted by the United Nations in 2017 and entered into force on 22 January 2021.

It is the only international agreement that aims to ban a broad range of activities associated with nuclear weapons, including their use, threatened use, development, possession and storage. The Treaty also promotes support for victims of nuclear weapons and the restoration of radioactively contaminated environments.

There are currently 86 signatory states. The TPNW First Meeting of States Parties in Vienna will be an opportunity for all of the signatory countries to meet.”

The commitment of Etica Funds and ICAN

Etica has supported the “Italia, ripensaci” campaign promoted by Senzatomica and the Rete Italiana Pace e Disarmo (RIPD), ICAN’s partners in Italy, since late 2021.

The campaign was launched in October 2016 at the vote of the United Nations General Assembly First Committee on the resolution to establish a legally binding instrument for the decommissioning and ban of nuclear weapons.

Etica is supporting the campaign by attending and sponsoring certain events.

November 2021

Etica Funds participated alongside Senzatomica and RIPD in a meeting with the Welfare and Health Councillor of the Municipality of Milan. During the meeting, an ICAN representative met the General Manager of Etica at the offices of Etica Funds.

hablar actuar desarmar

January 2022

To mark the celebration of the first anniversary of the entry into force of the Treaty on the Prohibition of Nuclear Weapons (TPNW), Etica Funds took part in the online event “La forza del Trattato TPNW: miliardi di dollari già sottratti al business delle armi nucleari” organised by Senzatomica and RIPD.

February 2022

aldo bonati

Etica Funds participated in the eventIl Trattato TPNW contro le armi nucleari: risultati raggiunti e prossimi passi sul tema” in Milan as part of the “Italia, ripensaci” campaign promoted by Senzatomica and Rete Italiana Pace e Disarmo, with the collaboration of Aldo Bonati, Stewardship and ESG Networks Manager at Etica Funds. The event focused in particular on financial divestment from nuclear weapons production and nuclear arsenals, the dialogue with politicians aimed at enabling Italy to attend the TPNW First Meeting of States Parties in Vienna, and the positive role played by local authorities in promoting disarmament. Also speaking at the event was Laura Boldrini, the first signatory of the resolution which was recently approved by the Foreign Affairs Committee of the Chamber of Deputies.

June 2022 –  Treaty on the Prohibition of Nuclear Weapons First Meeting of States Parties

Etica Funds attended the Treaty on the Prohibition of Nuclear Weapons First Meeting of States Parties in Vienna, held on 19 to 23 June 2022.

Sunday 19 June – ICAN Nuclear Ban Forum

The Forum organised by ICAN was held over two days and brought together internationally recognised experts on social change and innovation, academics and scientists. Etica Funds will take part in a round table focused on the power of asset management companies to promote disarmament in countries and divert investments towards sustainable activities with positive social impacts.

Tuesday 21 June – Treaty on the Prohibition of Nuclear Weapons First Meeting of States Parties

Etica will take part in the event as part of the ICAN delegation. At the event, Etica will participate in the meeting by reading an investor statement prepared in collaboration with ICAN which will be presented to international investors for signature in the coming weeks.

July 2023

The 2023 report of Don’t Bank on the Bomb is titled “Moving Away from Mass Destruction: 109 exclusions of nuclear weapon producers” and highlights the 109 financial institutions that have adopted policies to exclude investments in companies involved in the development, production, testing, maintenance, and storage of nuclear weapons. These are banks, pension funds, asset managers, and other actors in the financial sector that actively demonstrate a commitment to nuclear disarmament. Compared to the 2022 report, 11 new institutions have been added.

October 2023

As part of its advocacy work with governments, regulators, and standard setters, Etica in recent years has initiated a dialogue with the Italian state, as an investor in Italian public debt securities and in the interest of its fund clients, to promote divestment from nuclear weapon producers.

The primary goal is to engage in dialogue with the Government so that it participates in the second Meeting of the States Parties to the Treaty on the Prohibition of Nuclear Weapons, which will be held at the United Nations headquarters from November 27 to December 1, 2023, as an “Observer State”. Italy’s presence at this meeting, even as an observer, having not yet signed the Treaty, would be of great significance in the path to disarmament, a goal that Italy has always indicated as fundamental.

Following the letter sent in September 2023, Etica has opened a channel of listening and dialogue with the Italian institutions, which we hope can be a stimulus to move in the hoped-for direction.

November 2023 – Treaty on the Prohibition of Nuclear Weapons Second Meeting of States Parties

Etica Funds and ICAN presented a new Declaration at UN in New York to stop funding for nuclear weapons. During their meeting, Etica has renewed its commitment to nuclear disarmament. At the meeting in Vienna in June 2022, Etica, along with ICAN – the International Campaign to Abolish Nuclear Weapons, winner of the 2017 Nobel Peace Prize, had presented an Investors’ Declaration that provided detailed guidance to State Parties on how to stop funding the production and maintenance of nuclear arsenals. In New York, Etica and ICAN have updated the Declaration, expanding recommendations for States and including a specific commitment for financial institutions that sign it.

These are the events in New York that Etica has attended:

November 29, 2023 – Wall Street and the nuclear ban treaty (with Aldo Bonati, Etica Funds’ Stewardship and ESG Networks Manager)

Ongoing threats to use nuclear weapons create a systemic risk for investors. The mere news of their possible deployment has an immediate negative effect on financial markets, across every sector and asset class. In the context of Russia’s repeated threats to use nuclear weapons in the ongoing Ukraine conflict, and as the global regulatory environment enhances attention to ESG, investors should be monitoring and looking at the various approaches to minimize this risk across their portfolios.

This breakfast discussion will bring together asset managers, asset owners, data and service providers and nuclear experts to inform about the current context and explore the strategies investors can use to assess, address and minimize their own portfolio exposure as well as contribute to the global norms preventing harms from these weapons of mass destruction.

Since the UN Treaty on the Prohibition of Nuclear weapons (TPNW) became international law, 140 countries have expressed their support, more than 2,000 members of parliaments have pledged to implement the agreement, and 700 cities have passed resolutions in support of the Treaty. Recognising that no modern agreement can be implemented without broad stakeholder support, more than 100 members of the financial community have publicly supported the treaty through policies and statements. These are some of the ways that the implicit permission to make weapons of mass destruction is being revoked. Specifically, the inclusion in the Treaty of the prohibition of assistance with production, manufacture, stockpiling, development and use of nuclear weapons has important implications for the financial sector – now  financing nuclear weapons is illegal under international law.

This discussion will examine the new legal landscape as a result of the TPNW, share existing strategies among investors to address the risks of nuclear weapons, and explore new opportunities and implications for the investment community to support the renewed global movement against nuclear weapons.

This event has been supported by Etica Funds, Domini Impact Investments and Green Future Wealth Management. 

November 29, 2023 – The role of the financial community in TPNW implementation (with Marco Carlizzi, Etica Funds’ Chairman)

Ongoing threats to use nuclear weapons create a systemic risk for the world. Responses to these threats include government action including through the TPNW, sanctions and other restrictions, and these activities impact markets and can be reinforced by the financial community. Investors have a stake in preventing nuclear weapons use at any time and in any place. Investors are already key stakeholders in efforts to prevent biodiversity loss, to slow climate change, and to protect human rights. The financial community’s efforts to engage with and halt the ongoing development and potential use of nuclear weapons is also growing.

The UN Treaty on the Prohibition of Nuclear Weapons (TPNW) entered into force on January 22, 2021. It is a landmark agreement that comprehensively prohibits the development, manufacturing, testing, possession, use and threat of use of nuclear weapons. Article 1 (e) of the Treaty on the Prohibition of Nuclear Weapons makes it a violation of the treaty for a State Party to “assist, encourage or induce, in any way, anyone to engage in any activity prohibited to a State Party under this Treaty.”

The prohibition of the production of nuclear weapons implies prohibiting the financing that enables the production to proceed.  The treaty’s prohibition of assistance on banned acts means it is also against the treaty to authorise investment of public or private funds in the development, production, manufacturing or stockpiling of nuclear weapons or other nuclear explosive devices.

While States bear the responsibility for the full implementation of the Treaty and its articles, and for ensuring that all those operating within their jurisdiction adhere to the standards set forth, there may be implications for investors, or a role for investors in supporting the fulfilment of its objectives. The human rights risks associated with nuclear weapons are severe and irremediable, and the companies producing key components for nuclear arsenals are contributing to these human rights risks.

This side event will hear from states, the financial community and experts on the ways and means they are revoking implicit permission to make weapons of mass destruction through the Treaty on the Prohibition of Nuclear Weapons.

November 30, 2023 – Second Conference of the Parties to the Treaty on the Prohibition of Nuclear Weapons
Etica Sgr participated in the event as part of the ICAN delegation. On this occasion, Etica intervened in the meeting by reading an investor statement to the United Nations, prepared together with ICAN, the International Campaign to Abolish Nuclear Weapons.

February 2024

Padova and Milan have hosted the Annual Meeting of the Global Alliance for Banking on Values, a gathering of over 70 banks and financial institutions from 45 countries across Asia, Africa, Latin America, North America, and the EU.

On Wednesday, February 28th, at the Feltrinelli Foundation in Milan, there was a lecture by Susi Snyder, coordinator of ICAN – International Campaign to Abolish Nuclear Weapons, and winner of the 2017 Nobel Peace Prize (you can find the recording here).

During the meeting, the “Manifesto for a Peaceful Finance” was launched, which is endorsed by all the organizations participating in the GABV, with the aim of expressing the Alliance’s vision, condemning any form of conflict, and calling on all mainstream financial institutions to not finance the production and trade of weapons.

GABV urges the financial industry to stop financing the production and trade of weapons. It encourages financial institutions to introduce or expand existing policies that limit funding to the arms industry and to transparently disclose them.

A study commissioned by GABV and the Ethical Finance Foundation for this occasion highlighted the key role of the global financial industry in the arms trade, thereby facilitating the proliferation of armed conflicts. Last year, financial institutions worldwide directed over 959 billion dollars to support the production and trade of weapons.

You can download the Manifesto for a Peaceful Finance here.

[1] One of the strengths of the campaign is that the Italian word for “disarm” (disarmare) contains the word “love” (amare). So, obscuring some characters (D, I, S and R) we bring out “love” (amare).

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