A group of institutional investors and NGOs, led by SfC, ask the Norwegian fund to divest from Rheinmetall
A group of European institutional investors and NGOs, led by SfC – Shareholders for Change’s founding members Bank für Kirche und Caritas (BKC) and Fondazione Finanza Etica, sent a letter to the Norwegian pension fund on the 19th of May. In the letter, they call on the sovereign wealth fund to reconsider its investment in the German defence group Rheinmetall, which supplies bombs to Saudi Arabia for the war in Yemen, and to enter into a critical dialogue with the company on its arms export practices.
Tommy Piemonte, Head of Sustainability Research at BKC, describes the background to the letter as follows: “Investors should stop supporting companies that export arms to countries that are involved in or contribute to human rights violations. Especially if this violates their own investment policies.”
The Yemen war has no international legitimacy and has already killed over 100,000 people since 2015
The Yemen war has no international legitimacy and has already killed over 100,000 people since 2015, including 12,000 civilians in directly targeted attacks. During the conflict, a large number of bombs used by the Saudi Arabia-led alliance have been produced and supplied by Rheinmetall’s Italian subsidiary RWM Italia SpA. On December 11 2019, a group of human rights organisations led by the European Center for Constitutional and Human Rights (ECCHR) filed a criminal complaint with the International Criminal Court in The Hague against arms companies, including Rheinmetall, that, by supplying arms to Saudi Arabia, have, knowingly, supported human rights violations in Yemen.
The Norwegian fund is the world biggest sovereign fund. It invests according to precise ethical guidelines and divests from companies that are not compliant with them.
The Norwegian fund, established in 1990 to invest the surplus revenues of the country’s petroleum sector, is the world biggest sovereign wealth fund with total assets under management of over €930bn and is currently a major investor in Rheinmetall, owning 2.57% of its shares for a total of ca. €116m.
“The fund invests according to precise ethical guidelines since 2004 and divests from companies that are not compliant with them”, explains Simone Siliani, director of Fondazione Finanza Etica. “We believe that the investment in Rheinmetall is in clear breach of the fund’s guidelines”. According to Section 2,1 of the guidelines, “the Fund shall not be invested in companies which (…) produce weapons that violate fundamental humanitarian principles through their normal use“.
As early as 2017, the Bank für Kirche and Caritas and Fondazione Finanza Etica have been calling on Rheinmetall’s Executive and Supervisory Boards, at the annual general meetings of the company, to refrain from exporting arms to countries that are involved in or contribute to human rights violations. So far Rheinmetall has ignored these appeals and reference to the fact that such arms exports may result in legal actions and sanctions for the company due to human rights violations, possibly resulting in financial losses. “We hope to be able to convince the Norwegian pension fund as a major shareholder to exert pressure on Rheinmetall’s corporate governance in order to avoid, in its own interest, reputational, legal and financial risks” adds Piemonte.
The letter was co-signed by a number of German and Italian investors with a total of € 38 billion assets under management, as well as NGOs. They include DKM, ECCHR, GLS Bank, Greenpeace Germany, Pax Bank, Steyler Bank, Urgewald and Rete Italiana per il Disarmo.