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July 16, 2011
Investors Call for International Treaty on Conventional Arms
    by Robert Kropp

Twenty-one institutional investors and signatories to the Principles for Responsible Investment argue that the Arms Trade Treaty will protect investors by addressing the irresponsible transfer of conventional weapons.

Describing themselves as universal owners—investors whose holdings reflect the economy at large—a coalition of 21 institutional investors representing assets of more than $1.2 trillion have called for passage of a legally binding Arms Trade Treaty (ATT), which, the signatories argue in a statement, could "reduce financial risk from negative social impacts and protect our reputation linked to investment decisions and practices."

The investors, all of which are signatories to the United Nations' Principles for Responsible Investment (PRI), argue further that irresponsible supplies of conventional weapons can contribute to human rights violations, intensify conflicts, and lead to widespread corporate corruption. The statement cites a finding by the US Department of Commerce that approximately half of all corrupt transactions globally occur in the arms trade.

Describing the ATT as a "historic opportunity to better manage these risks," the coalition called for an international agreement that prevents the transfer of conventional arms and ammunition when doing so could lead to humanitarian violations and corruption. The investors also called for sanctions, criminal and otherwise, "that are broadly similar across states," as well as adequate annual reporting on all arms transfers.

Currently, the global trade in conventional arms remains unregulated. The United Nations Office for Disarmament Affairs (UNODA) has been holding Preparatory Committee sessions in advance of a 2012 Conference on the Arms Trade Treaty, the intention of which is "to elaborate a legally binding instrument on the highest possible common international standards for the transfer of conventional arms."

François Meloche, Extrafinancial Risks Manager at Batirente, a Canadian pension fund, stated, "Investors support a strong ATT because it makes long-term financial sense, but also because it will help defense companies, in which they may be investing, to implement stronger corporate human rights policies and practices."

Of the 21 signatories to the statement, only Calvert Investments is headquartered in the US.


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