Bank of America and JP Morgan, among 74 of 158 financial institutions, invested in companies producing internationally banned weapons.
Despite the international ban on cluster bombs, more than 150 financial institutions have invested $28 billion in companies that produce them, according to a new report released Thursday.
Bank of America, JP Morgan Chase, and Wells Fargo are among the 158 banks, pension funds, and other firms listed in the “Hall of Shame” compiled by the Netherlands-based organization PAX, a member of the Cluster Munition Coalition (CMC).
The report, titled Worldwide Investments in Cluster Munitions: A Shared Responsibility (pdf), finds that the leading investors come from 14 countries including the U.S., the UK, and Canada. Of the top 10 overall investors, the U.S. is home to eight. Japan and China round out the last two.
Both the UK and Canada—along with France, Germany, and Switzerland, whose institutions are also named on the list—have signed the 2008 Oslo treaty known as the Convention on Cluster Munitions banning the use of the indiscriminate bombs under international law.
The U.S., which hosts by far the most companies on the list with 74, is not a signatory.
Cluster bombs, which can be launched from the air or ground, operate by ejecting smaller sub-munitions or “bomblets” that can saturate an area of several football fields, according to CMC. They can remain volatile long after a conflict ends.
“Financial institutions must stop turning a blind eye to the lethal consequences of their investments,” said CMC ambassador Branislav Kapetanović, who survived a cluster bomb in Serbia 16 years ago. “Cluster munitions are being used in Yemen and Syria, causing significant civilian casualties including among children and women. All banks and financial institutions must prohibit investment in companies that produce these indiscriminate weapons.”
One type of cluster bomb, produced by the U.S.-based company Textron, has been used by the Saudi Arabia-led coalition in Yemen since March 2015, the report states, citing research by Amnesty International and Human Rights Watch.
Some of the countries listed in the report have adopted legislation (pdf) that bans certain forms of investment in cluster bombs, including Belgium, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, New Zealand, Samoa, Spain, and Switzerland. Others have “made an interpretive statement that investments in cluster munitions are or can be seen as prohibited by the Convention on Cluster Munitions.”
But more needs to be done, PAX said, noting that its recommendations “all come down to one simple message: disinvest from producers of cluster munitions now!”
For financial firms, that means ending any connection to cluster bomb manufacturers on every level—commercial banking, investment banking, and asset management, the report states.
It continues: “Financial institutions should develop policies that exclude all financial links with companies involved in cluster munitions production. Because all investment facilitates this production, no exceptions should be made for third-party financial services, for funds that follow an index, or for civilian project financing for a company also involved in cluster munitions.”
Co-author Suzanne Oosterwijk said, “It is an outrage that so many financial institutions have no qualms about investing in companies that make banned cluster munitions,” though she noted that some companies have made proactive steps to end those links.
“We commend these financial institutions for halting their investments and encourage others to follow suit,” she said.