A first, important success, in the engagement with Norwegian Fund on Rheinmetall
In May 2020, 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 (GPFG or Government Pension Fund Global). They called on the Fund to reconsider its investment in the German defence group Rheinmetall, involved in the supply of bombs to Saudi Arabia for the war in Yemen, and enter into a critical dialogue with the company on its arms export practices.
After one year, we start to see the first results of this engagement initiative.
On 8 of June, the Norwegian Parliament approved a new exclusion criterion on arms sales, proposed by the Ethics Committee of the Fund, to guide the investments of the GPFG. According to the criterion, the world’s largest sovereign wealth fund (1,140 billion in assets) should in future no longer make investments in companies that sell arms to states at war. A first step towards a probable future exclusion of Rheinmetall from the GPFG.
“Companies like Rheinmetall should see the Norwegian fund’s decision as a wake-up call“, explains Tommy Piemonte, head of sustainability research at the German Catholic bank Bank für Kirche und Caritas, founding member of SfC. “So far, Rheinmetall’s management has ignored our warnings in the AGMs of the company. Exports to countries at war can lead to financial risks due to possible human rights violations. In addition to reputational risks and possible litigations“.
If the new criterion will be adopted by the fund, the company won’t be able to ignore the warnings of active shareholders any longer.
Bank für Kirche und Caritas and Fondazione Finanza Etica have been engaging Rheinmetall on behalf of Shareholders for Change since 2018.