This article was originally posted at Ploughshares.org.
What if I told you your hard-earned retirement savings are likely invested in companies that manufacture weapons of war? If that doesn’t sit right with you, you’re not alone. My name is Grant Bradski, and I work at As You Sow, the nation’s leading shareholder advocacy nonprofit which works to increase corporate responsibility on a broad range of environmental and social issues. I’m passionate about my role as our Sustainable Investing Initiative Coordinator because I get to help build tools like Weapon Free Funds that empower everyday investors to align their investments with their values. Now more than ever, our Invest Your Values tools play a critical role in helping investors uncover this unfortunate truth: the savings of millions of Americans are financing arms manufacturers making nuclear missiles, cluster bombs, and other controversial military weapons used in wars and armed conflicts all over the world.
How do military weapon manufacturers end up in my retirement savings?
For many Americans savings for retirement, picking the right companies to invest in to secure your financial future can be an intimidating task. This is why most investors are invested in what are called mutual funds. You can think of a mutual fund as a basket of stocks. In each basket are shares of hundreds, if not thousands of different individual public companies. Mutual funds also invest in bonds – loans given to a company or government in exchange for regular interest payments.
These popular investment vehicles allow investors to diversify their investments, helping to ensure their portfolio grows steadily over time, regardless of the individual performance of any single company. Mutual funds are the most common investment options found in company 401(k) plans and personal portfolios. Because many mutual funds invest with an “own the entire market” strategy, companies from every sector of the economy are bundled inside these investments. This includes everything from big tech to fossil fuels, and yes, even military weapon manufacturers like General Dynamics, RTX Corp, and Lockheed Martin.
The financial and ethical risks of investing in weapons of war
While mutual funds help investors diversify their investments and reduce risk, that doesn’t mean they are risk-free. When companies have business models that produce negative environmental and social impacts, that poses serious financial and ethical risks to investors saving for retirement.
Investing in weapons manufacturers can expose investors to financial risk. Considered particularly risky to responsible investors are companies involved with nuclear weapons and other weapons that are prohibited by international treaties, including, incendiary weapons, cluster munitions, and anti-personnel landmines. For example, Boeing and RTX Corp are involved in the production of U.S. nuclear-armed missiles. Beyond the regulatory risk to these companies, weapons makers are also in constant jeopardy of reputational harm due to the destructive nature of their products.
Conscious investors may also be concerned about the humanitarian impacts of conventional military weapons, as well as potential violations of international human rights laws. Reporting from the New York Times has identified Boeing-made weapons used in attacks that killed civilians, including an Israeli airstrike on a United Nations-run school in central Gaza. Previous New York Times reporting has found that weapons made by Raytheon (now RTX Corp) were used in Saudi Arabian airstrikes that killed Yemeni civilians. Many ethical investors may find themselves asking: how do I avoid investing in products that destroy life?
There’s help on the way
Fortunately, there are tools that can help. Weapon Free Funds is a free investment transparency tool built to help responsible investors prioritize peace and people over war and violence. Leveraging research from non-profits and ethical investment firms, we identify investor-owned companies involved with arms manufacturing, which are then cross-referenced with the holdings of thousands of mutual funds and exchange-traded funds.
In a coming post, we’ll dive more in the specific risks of weapons investments. In the meantime, you can get started on your ethical investing journey now on Weapon Free Funds. Our site also includes an action toolkit investors can use to help shift their savings away from weapon investments. We all have the power to make a change and invest in a peaceful future.
