Booster puts pressure on index funds over weapons investments

David Beattie

The request to global index providers, including S&P Global, MSCI and FTSE Russell, is to remove companies involved in controversial weapons manufacture from the major index funds.

Index funds are an efficient and cost-effective way for investors to invest in a diverse range of stocks. Most investment managers use index funds to some extent. The continued inclusion of manufacturers of controversial weapons in the index funds makes it difficult to avoid them completely, particularly for everyday investors.

This initiative calls for index providers to remove these types of companies from the major index funds, as a way to provide certainty to investors that they are not passively investing in the manufacture of controversial weapons.

The open letter calls for global indices to exclude companies involved in the manufacture of cluster munitions, anti-personnel mines and chemical, biological and nuclear weapons from the main benchmarks. The initiative highlights a growing expectation that index providers need to reflect investor practices and expectations, making it easier for investors to actively avoid investing in companies that still manufacture controversial weapons.