Dutch Sustainability Research (DSR)Ronald Lubberts, Managing Director

Dutch Sustainability Research (DSR)Ronald Lubberts, Managing Director

Controversial Weapons Radar

 Solutions and implications for main stream institutional investors to avoid investments in controversial weapons

• Established in 2002 by PGGM, Fortis MeesPierson and Triodos Bank

• Leading provider of ESG services to investors in Benelux market

• Founder and major shareholder of SiRi Company

• Member and shareholder of European Corporate Governance Service (ECGS)

• 9 FTEs including 7 full-time analysts

• Major clients: ABP, Cordares, Delta Lloyd, Fortis MeesPierson, ING

Investments, MN Services, TKP Investments, PGGM, Triodos Bank

• Established in 2002 by PGGM, Fortis MeesPierson and Triodos Bank

• Leading provider of ESG services to investors in Benelux market

• Founder and major shareholder of SiRi Company

• Member and shareholder of European Corporate Governance Service (ECGS)

• 9 FTEs including 7 full-time analysts

• Major clients: ABP, Cordares, Delta Lloyd, Fortis MeesPierson, ING

Investments, MN Services, TKP Investments, PGGM, Triodos Bank

Background DSR

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• Use has disproportinate humanitarian impact on civilian populations

• Impact on civilian populations long after military conflicts have ended

• Typical examples (high relevance): Anti-personnel mines, Cluster bombs, Depleted urannium ammunition, Nuclear weapons

• Other examples (less relevance): Biological weapons, Chemical weapons, Laser blinding weapons

• Use has disproportinate humanitarian impact on civilian populations

• Impact on civilian populations long after military conflicts have ended

• Typical examples (high relevance): Anti-personnel mines, Cluster bombs, Depleted urannium ammunition, Nuclear weapons

• Other examples (less relevance): Biological weapons, Chemical weapons, Laser blinding weapons

Why are ‘Controversial Weapons’ controversial?

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• Controversial weapons typically covered by international law

• Examples: NPF Treaty, CCW including Protocols I-V, Ottawa Convention

• However, important loopholes:

• Company located in country not signatory to treaty

• Unclear whether weapon falls under scope of treaty

• Relevant international treaty does not make activities illegal

• Controversial weapons typically covered by international law

• Examples: NPF Treaty, CCW including Protocols I-V, Ottawa Convention

• However, important loopholes:

• Company located in country not signatory to treaty

• Unclear whether weapon falls under scope of treaty

• Relevant international treaty does not make activities illegal

International Legal Context

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• Company involvement in controversial weapons in general not illegal

• Investments or providing financing to such companies also not illegal

• However (investments in) such activities are often in conflict with

• The spirit and objectives of relevant international agreements

• National policy commitments of states in which companies are based

• Company involvement in controversial weapons in general not illegal

• Investments or providing financing to such companies also not illegal

• However (investments in) such activities are often in conflict with

• The spirit and objectives of relevant international agreements

• National policy commitments of states in which companies are based

Implications for investors - 1

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• Business as usual can for investors create potential conflicts with basic ethical values and raise consistency questions

• Leadership by high-profile investors CW investments makes these so-far hidden conflicts more visible

• More sophisticated and high-profile media campaigns increase reputation risks

• Inter-governmental negotiations e.g. on cluster weapons furthermore undermine business as usual approach

• Business as usual can for investors create potential conflicts with basic ethical values and raise consistency questions

• Leadership by high-profile investors CW investments makes these so-far hidden conflicts more visible

• More sophisticated and high-profile media campaigns increase reputation risks

• Inter-governmental negotiations e.g. on cluster weapons furthermore undermine business as usual approach

Implications for investors - 2

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• Assess whether such investments are acceptable from a policy, ethical or reputation perspective. If not,

• Develop investment policy

• Implement policy

• Define communication strategy

• Assess whether such investments are acceptable from a policy, ethical or reputation perspective. If not,

• Develop investment policy

• Implement policy

• Define communication strategy

How can investors address this dilemma?

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• CW research conducted since 2004

• As of 06/07 growing market interest (launch CWR)• Expansion of client base• Expansion of coverage• Review of research methodology and reporting• First release CWR provided to clients in June 2007

• CW research conducted since 2004

• As of 06/07 growing market interest (launch CWR)• Expansion of client base• Expansion of coverage• Review of research methodology and reporting• First release CWR provided to clients in June 2007

Controversial Weapons Research DSR

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• Use of broad variety of information sources

• Use of clear definitions of weapon types

• Detailed sourcing

• Input from external experts

• Contact with the company and feedback

• Quarterly updates since of June 2007

• Use of broad variety of information sources

• Use of clear definitions of weapon types

• Detailed sourcing

• Input from external experts

• Contact with the company and feedback

• Quarterly updates since of June 2007

Research Methodology

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• Defining controversial weapons• Defining involvement in controversial weapons– Own activities or JV/participations?– Nature of activities (production weapons, components, launching systems,

R&D)? – Past or current?– Other?

Who sets the standards?

• Defining controversial weapons• Defining involvement in controversial weapons– Own activities or JV/participations?– Nature of activities (production weapons, components, launching systems,

R&D)? – Past or current?– Other?

Who sets the standards?

Defining Company Involvement

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• Provide state-of-the art research on company involvement in Controversial Weapons

- Reliable, up-to-date and clearly sourced information

- Transparent and up-to-date definitions

- Presentation of data in format that facilitates implementation of client-specific policies

• Policy advise provided separately if requested

• More focus on nature of involvement rather than determining whether direct involvement or not

• Provide state-of-the art research on company involvement in Controversial Weapons

- Reliable, up-to-date and clearly sourced information

- Transparent and up-to-date definitions

- Presentation of data in format that facilitates implementation of client-specific policies

• Policy advise provided separately if requested

• More focus on nature of involvement rather than determining whether direct involvement or not

Main objectives Controversial Weapons Radar

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Controversial Weapons Radar ©

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Dutch Sustainability ResearchRonald Lubberts, Managing Director

Details:Tel +31 (0)30 694 2318Ronald.lubberts@dsresearch.nl Visiting address: Regulierenring 12 d/e, BunnikPostal address: PO Box 55, 3700 AB Zeist, The Netherlands

Dutch Sustainability ResearchRonald Lubberts, Managing Director

Details:Tel +31 (0)30 694 2318Ronald.lubberts@dsresearch.nl Visiting address: Regulierenring 12 d/e, BunnikPostal address: PO Box 55, 3700 AB Zeist, The Netherlands

Contact Information

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