The €334bn civil service scheme ABP has divested its €20m stake in India’s Larsen & Toubro after the company allegedly failed to clarify its involvement in the manufacture of submarines with the ability to carry nuclear weapons.
In the pension fund’s opinion, the company failed to respond adequately to allegations of direct involvement in the manufacture of nuclear weapons in defiance of the Non-Proliferation Treaty (NPT).
Last April, ABP stated that Larsen & Toubro did not manufacture tailor-made products for nuclear arms systems, and therefore did not violate the NPT definition.
Its response at the time was triggered by a survey conducted by a Dutch pressure group against the arms trade.
However, a spokeswomen for ABP now says the pension fund had started engagement with Larsen & Toubro through its adviser Sustainalytics, after questions were raised about the company’s exact participation.
ABP also announced that it would not invest in Russia’s Motovilikha Plants JSC, “as a survey had shown involvement in the production of cluster weapons”.
According to its spokeswoman, ABP has not invested in this company.
In line with its responsible investment policy, ABP demands companies act in accordance with the UN Global Compact directive.
If there are signs these companies have violated human rights, labour or environmental laws, the pension fund will initiate a dialogue.
As a rule, the civil service scheme does not invest in companies that directly participate in manufacturing anti-personnel mines, cluster weapons, chemical and biological arms or – in defiance of the NPT – nuclear arms, it added.