‘Imperialist Russia’ Causes Another European Fund to Reinstate Weapons Manufacturers

Citing growing security concerns over “imperialist Russia,” AkademikerPension is removing nine defense industry companies from its exclusion list. The Danish pension fund, the latest European fund to ease rules on defense sector investing, announced it will no longer ban European weapons manufacturers that have links to nuclear weapons

“The security situation is currently worse than ever in recent times. Russia continues its brutal war against Ukraine,” AkademikerPension CEO Jens Munch Holst said in a statement. “We can see that Europe, despite many talks with the American government, is very isolated.” 

According to the pension fund, its board of directors changed its stance “in order to support European democracies.” However, it will continue to exclude weapons manufacturers associated with controversial weapons or human rights violations, and it will still exclude all weapons makers associated with non-European nuclear weapons programs, including the U.S. 

“Europe is facing the largest military buildup in recent times,” Holst said. “Therefore, we believe that it is the most responsible thing to do—both in terms of return and social responsibility in the current situation.” 

AkademikerPension named nine formerly excluded companies in which it can now invest: Airbus, Babcock International, Dassault Aviation, Leonardo, Saffron, Thales, Serco Group, Groupe Reel and Ultra Electronics. According to the pension, it lifted the exclusions because only a small portion of the companies’ revenues are derived from European nuclear weapons programs. It added that the companies have a total market value of 2.6 trillion kroner ($409 billion) and more than 400,000 employees. 

“We are not doing this to invest in nuclear weapons, but conversely, we do not want a small turnover from nuclear weapons-related activities to prevent us from supporting the capital construction of a European defense,” Munch Holst said.  

Aside from the companies taken off the exclusion list, the pension fund will continue to exclude 46 other weapons manufacturers, according to the statement, including RheinMetall, BAE Systems and Rolls-Royce, in addition to a significant number of large American companies. Despite the lifted restrictions, its portfolio will “continue to be underweight in the global defense and arms industry.” 

AkademikerPension is among a growing number of European pension funds that have lifted their rules on investing in the defense sector.  

In June, Finnish pension fund Varma announced it was updating its rules for investing in the weapons makers. However, Varma did not mention Russia among its reasons for the softened policy; instead, it cited the expanding defense sector, as well as “major technological” advances and increasing connections with other industries. 

“Products or services for the armed forces of different countries are often produced by companies in many other sectors, such as manufacturers of vehicles, aircraft, engines, and turbines,” the Finnish pension fund stated. 

In May, fellow Danish pension PFA Pension, the largest in the country, announced that it would reverse a self-imposed rule that prohibited investments in companies involved in nuclear weapons production. The change in position means it will now be able to invest in 10 listed companies, several of which are the same companies AkademikerPension reinstated, including Airbus, Dassault Aviation and Thales. 

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Tags: AkademikerPension, defense stocks