SSF Engagement Initiatives

Past initiative: Open letter to index providers on controversial weapons exclusions (Closed in May 2021)

From 2018 - 2021, SSF coordinated an investor initiative for an "Open letter to global index providers" to exclude controversial weapons* from mainstream indices.

This initiative closed in May 2021.


Image of the "Broken Chair" by Swiss artist Daniel Berset in Geneva, symbolizing the victims of landmines and cluster munitions.

Detailed description

A number of international conventions prohibit or restrict the development, production and use of controversial weapons. Some countries have gone further by implementing legislation against direct and/or indirect financing of such weapons. For institutional and individual investors, excluding companies involved in controversial weapons has become standard practice or expectation. However, mainstream indices continue to include such companies. This is causing a problem for active and passive investors who may be subject to extra tracking error and/or additional costs, or unable to invest in controversial weapons-free solutions.

Swiss investors, therefore, launched this investor initiative and SSF coordinated the collection of signatories who also support the idea that index providers should remove companies involved in controversial weapons from mainstream indices.

Launched in August 2018, this initiative collected over 170 signatories from 20 different countries representing about USD 10 trillion.

During the week of 4 February 2019, SSF began engaging with large index providers, sharing with them background on the initiative, a list of current co-signatories and an invitation to enter into discussions. Throughout 2019, SSF and signatories of the initiative entered into numerous discussions with different index providers, many of which have been open and receptive to discussions. The signatories and SSF continued discussions in 2020, further engaging with index providers to recommend solutions that ultimately help investors avoid investments in controversial weapons companies.


Initiative closure (updated May 2021)

Over the last few years, considerable steps forward have been made in the area of controversial weapons disclosure and investor awareness, not least due to the actions of the EU Commission in the area of sustainable finance. These developments lead SSF to close its initiative. Two of the most noteworthy developments are:

  1. On 4 February 2021, the three European supervisory authorities (EBA, EIOPA and ESMA) published their final report and draft RTS on disclosures under SFDR. The draft RTS include specific clauses on disclosure around controversial weapons investments for financial products. Compliance with these disclosure requirements is mandatory for product manufacturers exceeding 500 employees, even when financial products are not labelled sustainable/ESG (i.e. Article 8 and 9 products).

Within the document, ANNEX 1 – (Template principal adverse sustainability impacts statement), outlines various ESG issues that must be reported. In Table 1, section 14, it is clearly outlined that players are to report on the indicator “Exposure to controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons)” in terms of “share of investments in investee companies involved in the manufacture or selling of controversial weapons, the applicable year of impact, provide a detailed explanation and also report on any actions taken. This is a key step forward regarding transparency on controversial weapon investments.

2. In addition, on 3 December 2020, three delegated regulations were published specifying new sustainability-driven disclosure rules for benchmark statements and benchmark methodologies. The disclosure regulations entered into force on 23 December 2020. The requirements for all equity and fixed income benchmarks, amongst other ESG KPIs, include disclosure on:

  • International treaties and conventions, United Nations principles or, where applicable, national law used in order to determine what constitutes a ‘controversial weapon’.
  • Weighted average percentage of benchmark constituents in the controversial weapons sector.

Furthermore, and most related to our initiative, benchmark administrators seeking to have their benchmarks labelled as EU Climate Transition or EU Paris-aligned must exclude companies involved in any activities related to controversial weapons.


*cluster munitions, anti-personnel mines, biological and chemical weapons, as well as nuclear weapons which are produced for countries that have not signed the Treaty on Non-Proliferation of Nuclear Weapons

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