Investors should be banned from profiting from the production and trade in cluster bombs, landmines and other weapons outlawed by UN treaties, according to business and growth minister Annette Vilhelmsen (Socialistisk Folkeparti).
While Denmark has adopted treaties banning landmine and cluster bombs, a number of countries, including the US and China, have yet to do so.
Vilhelmsen now wants to specifically ban Danish institutions from investing in businesses that produce such weapons, which are criticised for killing innocent civilians.
“Danish investors need to stop contributing to the production of these indiscriminate weapons that lead to the death and suffering of civilians,” Vilhelmsen wrote in a press release. “Danish investors need to invest responsibly even when weapons are concerned.”
Vilhelmsen has given the responsibility for drawing up the legislation to Rådet for Samdfundsansvar, a corporate social responsibility group that was established last year by the Growth and Trade Ministry. The organisation is composed of 17 leading executives from the public, private and non-profit sector.
The Rådet for Samdfundsansvar will also attempt to determine the extent to which Danish businesses and pension funds have invested in producers of indiscriminate weapons.
“I want to call the pensions sector into a meeting to discuss the need to update the guidance for responsible investments,” Vilhelmsen wrote.
Vilhelmsen’s call for legislation mirrors moves made by countries such as Belgium, the Netherlands and Norway and is a strategy that is recommended by Thomas Nash, director of Article 36, a UK-based anti-weapons NGO.
“The safest way to stamp out investment in cluster munitions and their production is to put in place policies and laws at the national level that makes it impossible for financial institutions to invest in them,” Nash told The Copenhagen Post, adding that another effective tool is to actively screen companies' investments, like Norway does.
Nash co-ordinated the international campaign that resulted in the 2008 UN Convention on Cluster Munitions and argued that financial institutions needed to be involved in the process of crafting regulations.
“In countries including Norway, Belgium and New Zealand legislation has been put in place to prohibit investment following constructive discussions with banks, financial institutions and civil society,” Nash said.
The government has also been under pressure to ban investment in companies that produce military drones used by the US to fight militants in Yemen and Pakistan. Attacks carried out by drones are also blamed for causing large numbers of civilian casualties.
Last November it was revealed that Danish pension funds have invested heavily in companies that produce the drones. PensionDanmark, which controls the pensions of 620,000 Danes, has investments in ten companies that produce parts for the drones, including Boeing, Northrop Grumman, Honeywell, Cobham and General Electric.
And in April far-left party Enhedlisten unsuccesfully proposed a law banning investment in these companies.