BAE Systems PLC
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
BAE Systems is a British defence and aerospace company that
manufactures electronics systems, military aircraft, aircraft control
systems, naval vessels, radars, and communications equipment. The
company has 96,000 employees worldwide.
Relevant principle(s)
BAE Systems is heavily involved in the military and defence sector. The
company produces weapons systems and other tools of warfare. The
company’s core business is military and defence. BAE Systems builds
nuclear submarines at its Barrow, UK factory. In 2006, a new Nuclear
Organization was set up within BAE Systems’ Submarines Solutions
division. Nuclear Engineering, Nuclear Technical and Nuclear
Operations, discharges responsibilities for fuel handling and fuelling
activities, along with associated training, management of fuelling and all
off-boat manufacturing activities at the Nuclear Build Facility and
Nuclear Capability resource. In June 2007, the UK’s Royal navy
launched its largest and most powerful attack submarine, the nuclearpowered Astute. BAE is the prime contractor for the Astute-class
submarine, responsible for the design, build and initial in-service
support. The Astute submarines are set to begin service in January
2009.
BAE Systems is involved in the production and support of the ASMP-A
missile, an air launched nuclear missile, through its 37.5 percent share
in MBDA, a guided missiles and missile systems company, jointly owned
by BAE Systems (37.5 percent), EADS (37.5 percent) and
Finmeccanica (25 percent). The sole function of an ASMP-A missile is
the delivery of nuclear warheads. Accordingly, the ASMP-A is
considered to be a key component of nuclear weapons. BAE is an active
owner of MBDA and contributes directly to the production of key
components to nuclear weapons.
1 -40
Cobham PLC
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production of
weapon systems
Company profile
Cobham has 3 sectors, namely Aerospace, Avionics and Flight
Operations. Cobham employs about 11,000 people on five continents
(concentrated within the UK, continental Europe, the US and Australia).
Relevant principle(s)
Carleton Technologies, part of Cobham Life Support Division, produces
pneumatic wing and tail actuators for various strike weapons systems,
including the AGM-154A JSOW. As a warhead, the AGM-154A variant
uses a cluster bomb dispenser with 145 BLU-97/B CEM (Combined
Effects Munition) bomblets (1.54 kg (3.4 lb) each) for use against soft
targets (i.e. effective against people, and lightly armored vehicles).
According to its website, Carleton Technologies considers the
development and production of (wing and tail) actuators as one of their
mainstream businesses. These are considered core components of the
cluster weapons they are developed and produced for and cannot be
qualified as dual-use.
2 -40
Finmeccanica SpA
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Finmeccanica is an Italian industrial group operating globally in the
aerospace, defence and security sectors. It is also active in satellite and
space services and has know-how and production capacity in the
energy and transport fields. Finmeccanica has important production
facilities in both Europe and the USA, has a workforce of 68,000 people
and is active in around 50 countries.
Relevant principle(s)
Finmeccanica is heavily involved in the military and defense sector. The
company produces weapons systems and other tools of warfare. The
company’s core business is military and defense and the company
receives 69 percent of its revenue from these activities.
Finmeccanica is engaged in the production of controversial weapon
systems, specifically nuclear weapons. Through its 25 percent share in
MBDA, a guided missiles and missile systems company, jointly owned
by BAE Systems (37.5 percent), EADS (37.5 percent) and
Finmeccanica (25 percent), Finmeccanica is involved in the production
and support of the ASMP-A missile, an air launched missile which forms
part of the French nuclear deterrent. The only function of an ASMP-A
missile is the delivery of nuclear warheads. Therefore, the ASMP-A is
considered a key component of a nuclear weapon. Furthermore,
Finmeccanica is an active owner of MBDA and contributes directly to the
production of key components to nuclear weapons.
3 -40
Rolls-Royce Group PLC
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Rolls-Royce is the second-largest aircraft engine maker in the world,
after General Electric. The group operates in four global markets: civil
aerospace (53percent) manufactures engines for aircraft ranging from
business jets to airliners; Defense Aerospace (21percent) focuses on
engines for combat, transport, and trainer aircraft, as well as helicopters;
Marine (17percent) delivers naval and commercial maritime propulsion
systems; and Energy (8percent) builds compressors and gas generator
sets for power generation and gas applications on and off shore. The
company also provides financial services (1percent). Rolls Royce
employs about 38,000 workers in 50 countries worldwide
Relevant principle(s)
Rolls-Royce produces the larger PWR2 reactors designed to meet the
operational requirements of the larger Vanguard and Astute class
nuclear ballistic missile submarines. The Vanguard class are the current
Ship Submersible Ballistic Nuclear submarines (SSBNs) of the Royal
Navy, each armed with up to 16 Trident II Submarine-launched ballistic
missiles (SLBMs). The class was introduced in 1994 as part of the
Trident nuclear weapons programme of the UK government. Astuteclass boats are equipped with Tomahawk cruise missiles. They can also
fire the new so-called tactical Tomahawk, currently under development.
Rolls-Royce is a major supplier for BAE Systems nuclear Astute-class
submarines and performs specialist repair and overhaul of their
submarines. The subsidiary of the company, Marine Power Operations
Limited, manufactures nuclear submarine propulsion systems.
4 -40
Safran SA
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Safran is a French company organised in four branches: Aerospace
Propulsion, Aircraft Equipment, Defence Security and Communications.
Safran SA is the mother company of companies Snecma and Sagem.
Safran has a total of 57,000 employees and is active in more than 30
countries.
Relevant principle(s)
Safran has significant involvement in the military and defence sector.
The company produces key components for weapon systems and other
tools of warfare, such as military aircraft and missiles. The company
receives 20 percent of its revenue from these activities.
Safran is involved in the development of nuclear weapons for the French
navy. Snecma propulsion Solide, a part of the Safran Group, is a
subcontractor to EADS, which through a joint-venture (G2P), provides
propulsion systems for the M51 submarine launched ballistic missiles.
Each missile carries six independently targetable thermonuclear
warheads. The M51 missile is set to be deployed in 2010 on France’s
new-generation ballistic missile nuclear submarines.
5 -40
Serco Group PLC
MSCI sector
Commercial Services &
Supplies
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Serco is a service company to the British government and to private
companies in four segments: Civil Government, Transport, Defence and
Science. Serco employs almost 43,000 people. Serco has business
activities within Belgium, France, Luxembourg, Switzerland and the
Netherlands. The company delivers services to government and private
clients in over 30 countries, including in the United Kingdom, North
America, Europe and the Middle East, and Asia Pacific.
Relevant principle(s)
Since 2000, Serco is in the management of the UK Atomic Weapons
Establishment (AWE), which provides the warheads for the UK’s
independent nuclear deterrent. Together with Lockheed Martin, it is
equal shareholder of AWE Management Ltd. (AWEML). AWE provides
and maintains the warheads for the UK’s nuclear deterrent. It provides
advice and operational solutions to many of the UK’s civil nuclear sites.
6 -40
Rio Tinto
MSCI sector
Materials
Relevant principle(s)
Serious environmental damage
Respect for human rights
Company profile
Rio Tinto's principal activity is exploring, extracting, and processing
minerals and metal resources. The group is the combination of Rio Tinto
PLC (registered in the UK) and Rio Tinto Ltd (registered in Australia),
structured as a single economic entity. The business structure of the
company is segmented into five product groups - aluminium, copper,
diamonds and industrial minerals, energy, and iron ore - and three
business support groups - exploration, technology and innovation, and
business resources. The group operates in the United Kingdom,
Australia, Canada, France, Indonesia, Namibia, Papua New Guinea,
South Africa and the United States.
Relevant principle(s)
Rio Tinto formulated group wide policies and management systems on
all main ESG criteria. The company demonstrates best practices in
several domains, but appears to have problems to implement these
practices in all its operations. Rio Tinto is facing some strong
controversies on subjects such as biodiversity, human rights and
communities' relations. The company faces difficulties in maintaining its
social license to operate, and, being one of the largest diversified
companies, its footprint is expansive and often results in stakeholder
controversies.
There appears to be a discrepancy between the company’s policies and
practices. This is particularly visible in Rio Tinto’s involvement in the
Grasberg mine. This environmentally damaging practice does not
comply with the company’s own environmental principles, but Rio Tinto
remains its stake in the Grasberg mine, stating that riverine disposal is
the best possible solution in this complex mining area.
7 -40
Thales SA
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
The French company Thales is developer and manufacturer of
information systems for the Aerospace, Defence and Security markets
with operations in 50 countries and has 68,000 employees worldwide.
Relevant principle(s)
Thales is heavily involved in the military and defence sector. The
company produces weapons systems and other tools of warfare. The
company’s core business is military and defence and the company
receives 70 percent of its revenue from these activities.
In 2004, Thales Underwater Systems, a wholly-owned subsidiary of
Thales was awarded a contract from the UK Ministry of Defence’s
Defence Logistics Organisation for a range of submarine, surface ship,
and mine hunting sonar systems. The contract gives Thales the
responsibility and control of providing sonar operational availability for
major nuclear submarines worldwide including the Swiftsure and
Trafalgar classes. Thales will provide design authority, commodity
management, technical support including spares, repairs and
engineering support. The contract is set to run for a period of ten years.
Thales Optronics, another subsidiary, provides visual systems to BAE
Systems for use on their nuclear submarines. As the company
manufactures products for use on nuclear submarines, Thales is
considered to have direct involvement in nuclear weapons.
The company is involved in the production of controversial weapon
systems. Thales is 100 percent owner of TDA (Thomson Dasa
Armaments). TDA is manufacturer of rockets and cluster bombs, e.g.
the mortar ammunition PR Cargo. Furthermore, through TDA’s Belgian
subsidiary, Forges de Zeebrugge, Thales is involved in the development
of sub-munition (the FZ101-rocket). In addition, Thales is engaged in the
production of components for nuclear weapons through the production
of ‘guidance systems’ for MBDA (a joint venture of BAE Systems,
Finmeccanica and EADS). Finally, Thales delivers infrastructural
services to EADS for the development of nuclear warheads.
8 -40
Vedanta Resources PLC
MSCI sector
Materials
Relevant principle(s)
Serious environmental damage
Respect for human rights
Company profile
Vedanta Resources (Vedanta) is a mining company focusing on
aluminium, copper, zinc and lead. The company’s principal operations
are located in India. Vedanta has an 80 percent stake in Sterlite
Industries in India and a 52 percent stake of Sterlite Industries in
Hindustan Zinc. The company also has substantial copper operations in
Zambia (51 percent stake in Konkola Copper Mines), and a copper mine
in Australia. In addition to the existing operations, Vedanta announced
extensive expansion projects across each of the metals.
Relevant principle(s)
The company is directly and indirectly involved in gross and serious
human rights violations and serious environmental damage, and is
taking insufficient measures to prevent similar situations from occurring
in the future. Particularly the unwillingness to change, results in the
recommendation to exclude the company from investment. Moreover,
the company informs that it intends to expand their operations and to
acquire outstanding stakes in several subsidiaries. This expansion of
operations will make it even more difficult for the company to uphold
social and environment standards, especially at the more controversial
subsidiaries. Furthermore, the company has been accused several
times by the Indian Supreme Court Monitoring Committee for expanding
its operations without proper permits and without complying with the
prescribed requirements. Vedanta published a Sustainable
Development Report in August 2008 that demonstrates commitments
towards people, the environment and local communities. The report is
aligned to the sustainability reporting standards of the Global Reporting
Initiative. Nevertheless, there exist doubts about Vedanta’s claims
regarding sustainability. In several different contexts there have been
allegations that Vedanta Resources has caused environmental damage
and contributed to human rights and labour violations. With regard to its
mining and industrial operations, the company has been convicted by
the Indian Supreme Court of repeated breaches of national
environmental legislation, illegal production expansions, irresponsible
handling of hazardous waste, violations against tribal peoples,
deplorable wages, and dangerous working conditions in the mines and
factories.
9 -40
ArcelorMittal
MSCI sector
Materials
Relevant principle(s)
Serious environmental damage
Serious violation of generally
accepted ethical principles
Company profile
ArcelorMittal (AM) is a steel producing company, with 320,000
employees in more than 60 countries. AM is the only producer offering
the full range of steel products and services. From commodity steel to
value-added products, from long products to flat, from standard to
specialty products, from carbon steel to stainless steel and alloys, AM
offers a complete spectrum of steel products, and supports it with
continuous investment in process and product research. Furthermore,
the company sources a significant proportion of its iron ore and coal
demand from its own mines.
Relevant principle(s)
ArcelorMittal is facing considerable criticism with regard to a lack of
transparency and complete openness about detailed plans and
implementation programmes. Mining accidents and serious pollution
continue, demonstrating that the company’s measures are not sufficient
to avoid violations of environmental, health and safety standards. Due to
operations in several fragile states, such as Liberia, India, Kazakhstan
and South Africa, the context in which ArcelorMittal is operating is
contested and unstable. Currently, the most problematic business
activities of ArcelorMittal that might result in violations of the SNS
Fundamental Investment Principles is the mine site on the Nimba
Mountain (part of the mountain is a World Heritage Site), the
involvement in a nuclear reactor project in Romania, the continuing
fatalities in the mines and the serious risk to human health caused by
mining operations in the Czech Republic. Despite several announced
measures, the violations continue and ArcelorMittal does not disclose
sufficient information about the implementation of its environmental and
health and safety plans.
Conclusion
The company is operating in a fragile context. The SNS Selection
Committee finds the issues severe enough for engagement.
10 -40
Credit Suisse Group AG
MSCI sector
Diversified Financials
Relevant principle(s)
Serious environmental pollution
Violation of general accepted
ethical principles
Company profile
Credit Suisse Group is an international financial services group. The
Group provides investment banking, private banking, and asset
management services to customers located around the world.
Relevant principle(s)
Credit Suisse is involved in several controversial projects like Mountain
Top Removal in the Appalachia mountains and the Rio Madeira Dam
Project. Besides, the company has not made clear how it has
implemented the Equator Principles in the risk assessment of it
investments.
Conclusion
The Selection Committee considered the allegations as serious, but not
sufficient for exclusion, without knowing more about their risk
assessment. The company is engaged.
11 -40
Daimler AG
MSCI sector
Automobiles & Components
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Daimler AG develops, manufactures, distributes, and sells a wide range
of automotive products, mainly passenger cars, trucks, vans and buses.
The Company also provides financial and other services relating to its
automotive businesses.
Relevant principle(s)
Daimler holds a stake of 22 percent in The European Aeronautic
Defence and Space Company (EADS), which SNS AM excluded from
investments because of its involvement in the production and support of
the ASMP-A missile, an air launched nuclear missile which forms part of
the French nuclear deterrent.
12 -40
MAN SE
MSCI sector
Capital Goods
Relevant principle(s)
Respect for human rights
Violation of general accepted
ethical principles
Company profile
Man Group was founded in 1783 and originated as an agricultural
operation involved in sugar and commodities trading and later cocoa
production. The company (formerly ED & F Man) sold its agricultural arm
in March 2000 through a management buyout and spun-off its
brokerage business, renamed MF Global, through an initial public
offering in July 2007. Man Group currently concentrates on asset
management, providing alternative investment funds to private clients
and institutional investors. As of September 2007, the company
employed approximately 4,500 staff in 13 countries.
Relevant principle(s)
Fritz Werner Industrie-Ausruestungen, a division of MAN Ferrostaal
Industrieanlagen GmbH, has a branch office in Yangon, Burma
(Myanmar). It operates in Burma under the name of Myanmar Fritz
Werner Industries Co., Ltd., a joint venture with Burma’s Ministry of
Industry. The joint venture was originally established in 1985 by the
Burmese government, which still holds a 60 percent equity stake in it,
and Fritz Werner, a former state owned company of the former West
German government, which held a 40 percent interest. Its is argued that
MAN Group’s ties to Burma’s military junta government makes it
complicit in human rights abuses, as the Burmese regime, which is
widely viewed as the most totalitarian military dictatorship of the world,
would be largely immune to international embargoes because of the
ordnance complex that was once set up by Fritz-Werner.
The involvement of Fritz Werner, part of MAN Group (MAN Ferrostaal
Industrieanlagen), in weapons production (small arms) in/for conflict
prone countries and oppressive regimes does lead to a violation of at
least generally accepted ethical principles, but a good case can be
made of the company’s complicity in human rights abuses.
13 -40
UBS AG
MSCI sector
Diversified Financials
Relevant principle(s)
Serious environmental pollution
Violation of general accepted
ethical principles
Company profile
UBS AG is a wealth management, investment banking, and asset
management firm. The company provides a variety of financial services
to individuals, institutions, corporations, governments, and financial
intermediaries around the world.
Relevant principle(s)
There are serious concerns on the financing of projects and companies
that might be considered controversial from the perspective of the
Fundamental Investment Principles. The company is involved in several
controversial projects like Mountain Top Removal in the Appalachia
mountains and the oil sector in Sudan. Furthermore, questions that have
been raised by the Dutch Governance Platform, among others at the
request of SNS AM, on becoming signature of the Equator Principles
are still pending. Next, UBS is not transparent and does not report on
integrating social and environmental standards in lending and
investment decisions.
14 -40
Barrick Gold Corp
MSCI sector
Materials
Relevant principle(s)
Serious environmental damage
Respect for human rights
Company profile
Barrick Gold is an international gold mining company engaged in the
acquisition, exploration and development of gold properties. Its products
include gold, copper, silver, and zinc. The company's operations are
comprised of 27 operating mines located in Argentina, Australia, Chile,
Canada, Papa New Guinea, Peru, Tanzania and the United States. In
addition, offices in Chile and Russia are actively working towards the
development of producing mines in those countries. Through its
acquisition of Placer Dome in 2006, Barrick has become the world's
largest gold miner. In 2007 and 2008, Barrick acquired Arizona Star, the
Kainantu mineral property in Papua New Guinea from Highlands Pacific
Limited. On May 4, 2009, Barrick announced that it had poured gold at
its newest mine, Buzwagi in Tanzania. Buzwagi came into production on
time and in line with its construction budget. The company also has two
other significant projects in construction: Cortez Hills in Nevada is
expected to come on line in the first quarter of 2010 and Pueblo Viejo in
the Dominican Republic is anticipated to contribute production in the
fourth quarter of 2011. Barrick Gold has approximately 11900
employees.
Relevant principle(s)
Barrick has been criticized for several incidents which caused severe
environmental damage or in which human rights were violated. Barrick
Gold is involved in riverine disposal in the Porgera mine. In 2006,
Barrick Gold acquired Placer Dome and inherited and herewith
integrated the Porgera mine among its mining interests. The mine has
been emptying millions of tons of tailings and waste rock into the
Porgera River since 1992, which is part of an 800-kilometer river system
that eventually empties into the Gulf of Papua. After the gold has been
extracted, the tailings (the mixture of finely ground ore, leaching
chemicals, and water) are neutralized before being discharged through
a pipeline directly into the Maiapam River, a small tributary to the
Porgera-Laigap-Strickland river system. The tailings discharge occurs
on a continuous basis, causing serious environmental damage
15 -40
Boeing Co/The
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Boeing is a leading aerospace company and manufacturer of
commercial jetliners and military aircraft. Boeing designs and
manufactures electronic and defence systems, missiles, satellites,
launch vehicles, and advanced information and communication systems.
Boeing operates the Space Shuttle and International Space Station for
NASA. The company also provides military and commercial airline
support services. Boeing employs around 150,000 people across the US
and is active in 70 countries.
Relevant principle(s)
Boeing Company is a supplier of various forms of maintenance and
upgrading services for a nuclear weapon, the Minuteman III ICBM, a
land-based intercontinental ballistic missile.
16 -40
Computer Sciences
Corp
MSCI sector
Software & Services
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Computer Sciences Corporation (CSC) provides information technology
and business process outsourcing, and information technology and
professional services. The company serves US Federal Government (36
percent of 2007 revenues) and global commercial (64 percent) clients.
Sales outside the US accounted for approximately 38 percent of the
company's 2007 revenues. CSC's overseas operations are located
primarily in Western Europe, Asia, Australia, India, and the Middle East.
Relevant principle(s)
CSC is involved in the manufacturing of components for weapons and
weapon systems. The company provides systems integration, C4ISR
systems engineering, logistics support, network management services,
test and evaluation services, and engineering services for naval, air and
missile platforms. The company cooperates directly with government
military agencies, and with major defence contractors including BAE
Systems and General Dynamics. CSC reported that sales to the US
Department of Defence accounted for approximately 24 percent (USD
3.6 billion) of the company's 2007 revenues and it is estimated that sales
from military weapons-related products accounted for approximately 16
percent (USD 2.4 billion) of 2007 revenues. In 2006, CSC was the 11th
largest defence contractor in the US. Earlier, CSC received USD 198.8
million in nuclear weapons and weapons systems contracts from the US
government in 2006. In addition to the involvement in weapon systems,
a subsidiary of CSC, Dyncorp, participates in the highly controversial
Plan Colombia. This is an anti-narcotic and aid program from the
Colombian government, funded by the US government. According to
Amnesty International, this Plan uses a military approach without
addressing the root causes of Colombia’s conflict. The company’s aid to
the Colombian military, which is involved in human rights violations, is
another concern to take into account..
17 -40
Freeport-McMoran
Copper & Gold Inc.
MSCI sector
Materials
Relevant principle(s)
Serious environmental damage
Respect for human rights
Company profile
Freeport-McMoRan Copper & Gold Inc. (FCX) is an international mining
company. It engages in the exploration, mining, and production of
mineral properties primarily in Indonesia, North America, South America,
and Africa. FCX focuses on the copper, gold, molybdenum, and silver
prospects. FCX has a dynamic portfolio of operating, expansion and
growth projects in the copper industry and is the world’s largest producer
of molybdenum. The company’s portfolio of assets includes the
Grasberg mining operation in the Papua rainforest, which makes FCX
among the largest US investors and employers in Indonesia. FCX has
almost 30,000 employees.
Relevant principle(s)
With regard to the Grasberg operations, FCX is facing strong
controversies on environmental and human rights issues, like security
arrangements and community relations. Tailings from the Grasberg
mine, which is majority owned by Freeport-McMoran Copper & Gold Inc.
are discharged directly into the local river system and then deposited on
a floodplain. Furthermore, in 2007 FCX acquired the company Phelps
Dodge and thereby started mining operations in the Democratic
Republic of Congo, a country which has been devastated by political
upheaval, war and widespread human rights abuses.
18 -40
GenCorp Inc
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Three thousand employees strong, Gencorp is a major technologybased manufacturing company headquartered in Sacramento,
California. Gencorp’s two businesses, Aerojet and Real Estate,
concentrate on two principal market areas: aerospace and defense, and
real estate.
Relevant principle(s)
The fully owned subsidiary of Gencorp, Aerojet, produces propulsion
systems for missiles that have no function other than to deliver nuclear
warheads. According to information on the website of the company, it
produces propulsion systems for the Trident III and the D Trident
missiles: Aerojet currently produces solid and liquid propulsion systems
for both the Air Force Minuteman III and the Navy D5 Trident missile
systems. KLD confirms this involvement.
19 -40
General Dynamics Corp
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
General Dynamics Corporation is a defence contractor specialised in
business aviation, land and expeditionary combat vehicles, armaments
and munitions, shipbuilding and marine systems, and mission-critical
information systems and technologies. General Dynamics has
manufacturing facilities in Australia, Austria, Canada, France, Germany,
Spain and Switzerland, and has customers in more than 30 countries. Its
major sales regions include the United States, Europe, and Asia Pacific.
The company employs approximately 83,500 people.
Relevant principle(s)
General Dynamics is producer of the HYDRA 70 rocket, an antimateriel, anti-personnel, and air-to-ground suppression rocket. The
HYDRA 70 rocket can be provided with various warheads including the
M261 Multipurpose Submunition. General Dynamics produces explosive
devices for various cluster weapons including the BLU-97. The company
also produces key components for the JSOW-A (Joint Standoff
Weapon) cluster bomb. General Dynamics is the producer of depleted
uranium tank rounds including the PGU/20-U 25mm. Furthermore,
General Dynamics is subcontractor for the XM-7 Spider System, a
landmine, developed and produced by the joint venture of Alliant
Techsystems and Textron.
20 -40
Goodrich Corp
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Goodrich Corporation, based in the US, provides components, systems,
and services for the aviation, defense, and space industries. The
company's Engine Systems segment manufactures engine housing
components, cargo systems, engine and fuel controls, pumps, and fuel
delivery systems for both aerospace engines and industrial gas turbines.
The company's Airframe Systems segment manufactures aircraft
landing gear, wheels, and brakes, and provides aircraft maintenance
services. The company's Electronic Systems segment provides sensors
and electronics for military launch and missile telemetry systems,
airborne surveillance and reconnaissance systems, and laser warning
systems. Goodrich has manufacturing and servicing operations
worldwide, including in India, Indonesia, Mexico, Singapore, and the
United Arab Emirates. The company employs about 23,400 people.
Relevant principle(s)
Goodrich manufactures key cluster bomb components, including the
actuation systems necessary for the Lockheed Martin Wind Corrected
Munitions Dispenser (WCMD) tail kit. The WCMD is attached to existing
cluster bombs to convert them into all-weather precision-guided
weapons that self-correct for launch problems, ballistic errors and winds.
Goodrich's control actuator assembly adjusts the bomb's trajectory to
keeps it on track and on target. This is not considered a dual-use
application.
Goodrich received USD 33.2 million in nuclear weapons and weapons
systems contracts from the US Government; Goodrich manufactures
Fighter & Bomber Take Off Shafts for various aircraft including the B-1
Bomber, B-2 Stealth Bomber and F-22 Raptor, which are capable of
carrying nuclear warheads (dual-use). Furthermore, Goodrich’s
Engineered Polymer Products Team produces composite Towed Array
Fairings, which it supplies to General Dynamics’ Electric Boat
Corporation for use on its Virginia Class (SSN-774) nuclear attack
submarines. The hydro-dynamic shape of Goodrich’s light-weight, nonmetallic fairing allows for smooth laminar flow of water over its surface
thereby reducing drag on the submarine. This is not considered an
essential component/technology to the nuclear attack submarine (dualuse).
21 -40
Halliburton Co
MSCI sector
Energy
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Halliburton Company provides various products and services to the
energy industry for the exploration, development, and production of oil
and gas properties worldwide. Sales to the US Government (primarily for
work in the Middle East) accounted for 31 percent of Halliburton's 2005
revenues. The company has operations worldwide. As of March 2006,
among the 100 countries Halliburton had operations in were
Afghanistan, Algeria, Indonesia, Iraq, Mexico, Nigeria, Russia, and
Venezuela. In 2005, Halliburton derived approximately 73 percent of its
revenues from operations outside the US.
Relevant principle(s)
Halliburton is facing many controversies varying from involvement in
corruption, antitrust lawsuits, health & safety incidents, and involvement
in human rights violations, mainly regarding rape, in countries like Chad,
Burma, Iraq and Cameroon. The main concern is their involvement in
weapon production and more precisely, the selling of nuclear
technologies to Iran.
.
22 -40
Honeywell International
Inc
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Honeywell is a multinational conglomerate company that produces a
variety of consumer products, engineering services, and aerospace
systems for private consumers, government and corporations. The
company is active in five business areas: aerospace, automation and
control, specialty materials, transportation systems, and intellectual
property. The company employs around 120,000 people in about 95
countries.
Relevant principle(s)
Honeywell Federal Manufacturing & Technology manages the Kansas
City Plant. The Kansas City Plant is a part of the National Nuclear
Security Administration (NNSA), a nuclear weapons complex, which
assembles and manufactures electronic and mechanical components for
national defence systems. Together with BWX Technologies and
Bechtel Corporation, Honeywell is managing the Pantex Plant for the US
Department of Energy. The Pantex plant is a nuclear weapons assembly
and disassembly facility in the US and is maintaining the safety, security
and reliability of the US nuclear weapons stockpile by upgrading the
nuclear warheads.
23 -40
ITT Corp
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Respect for human rights
Serious environmental damage
Company profile
ITT Corporation, a company based in the US, manufactures and
markets defense electronics and services; fluid technologies, including
pumps and wastewater treatment systems; and motion and flow control
equipment, including electronic connectors, shock absorbers, and
pumps and other systems for boating and aviation. Sales outside the US
accounted for approximately 35 percent of ITT's FY 2006 revenues. The
company has operations worldwide, in countries including Brazil, China,
Malaysia, Mexico, the Philippines, and South Korea. ITT has a global
workforce of approximately 37,500 employees.
Relevant principle(s)
As of June 2004, ITT Corporation was supplying pumping equipment for
the Three Gorges Dam project in China. This project is heavily criticised
for the risk of sedimentation and flooding and its negative impact on the
local population, the environment and national security. Furthermore, the
company is involved in the system design and development phase of
the Intelligent Munitions System, an anti-personnel mine when equipped
with the so-called battlefield override feature enabling the circumvention
of the man-in-the-loop feature. ITT Advanced Engineering & Sciences
performs tests of weapon effects and system response of nuclear
weapons and Ballistic Missile Defence systems, which are controversial
under international law. ITT’s capabilities are characterised by an
extensive testing background, focusing on data collection, data
recording, gage development and application. In 2004 and 2008 ITT
Corporation has been fined severely for violations of the US Arms
Export Control Act.
24 -40
Jacobs Engineering
Group Inc
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Principal activities of Jacobs Engineering are to provide technical,
professional and construction services to industrial, commercial, and
governmental clients around the world. Project services include
engineering, design, architectural and similar services, Construction
services include direct-hire construction and construction management
services. Clients of the group include companies in oil and gas
exploration and production and refining industries, pharmaceuticals and
biotechnology, chemicals and polymers, buildings and infrastructure,
technology and pulp and paper industries. The company has about
54,000 employees.
Relevant principle(s)
In December 2008, Jacobs announced its plans to acquire the minority
stake of British Nuclear Fuels (BNFL) in AWE (Atomic Weapons
Establishment) Management Limited. AWE, a joint venture between
BNFL, Lockheed Martin and Serco (each one third of shares), is
contracted to provide managment, maintenance, infrastructure and
support services to the UK nuclear weapons program (consisting of
Trident nuclear ballistic missiles). The original contract of 2000 was
reconsidered in 2003 and has a duration of 25 years.
25 -40
L-3 Communications
Holdings In
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
L-3 Communications is a US defence company in security
communications, government services, training and simulation and
aircraft modernisation and maintenance. The company also is a supplier
of guidance and navigation products and systems, sensors, scanners,
fuses, data links, propulsion systems, avionics, electro optics, satellite
communications, electrical power equipment, encryption products, signal
intelligence, antennas and microwave products. The company has
operations in the United States, Canada, Germany and Mexico. The
company has around 60,000 employees.
Relevant principle(s)
KDI Precision Products, a business unit of L-3 Communications, has
developed safety and arming devices for several weapon systems for
the US military inventory. These systems include the Joint Standoff
Weapon System (JSOW) cluster bomb for the company Raytheon.
.
26 -40
Lockheed Martin Corp
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Lockheed Martin is an aerospace manufacturer and technology
company and the world's largest defence contractor (by revenue).
Around 95 percent of Lockheed Martin's revenues come from the US
Department of Defence, other US federal government agencies and
foreign military customers. It employs 140,000 people worldwide.
Relevant principle(s)
Lockheed Martin is responsible for the design, development, upgrade
and support of the navigation system for the ballistic missile
(Polaris/Poseidon/Trident) submarine program. The navigation system
on the Trident submarine is capable of precisely locating the
submarine's position for pinpoint firing of the nuclear-armed ballistic
missiles. Lockheed Martin is one of the subcontractors of the Nevada
Test Site, a US Department of Energy reservation, established for the
testing of nuclear weapons. Lockheed Martin designed and produced
the Multiple Launch Rocket System (MLRS), a missile and rocket
artillery system with thousands of grenade-like sub-munitions. The
MLRS also fires the Army Tactical Missile System missiles, a dispensing
system capable of delivering various types of sub-munitions.
27 -40
McDermott International
Inc
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
McDermott International is a company based in the US, which principal
activity is to provide engineering, procurement, construction, installation,
project management and facility management services for customers in
the power and energy industries. It operates through three segments:
Offshore Oil and Gas Construction, Power Generation, and Government
Operations. McDermott has approximately 28,000 employees across 23
countries in North and South America, Asia Pacific, Caspian Sea and
the Middle East.
Relevant principle(s)
McDermott's Government Operations segment supplies nuclear
components to the US Navy and provides various services, including
uranium processing primarily within the nuclear weapons complex of the
US Department of Energy. The segment's activities are primarily
conducted through its subsidiaries, Babcock & Wilcox Nuclear
Operations Group, Inc. and Babcock & Wilcox Technical Services
Group, Inc. The company's Pantex and Los Alamos Plants work to
retrofit and repair nuclear weapons, handle and store plutonium and test
high-explosive components. As these are considered essential activities
for the maintenance of nuclear weapons, McDermott is considered to
have indirect involvement in the production of nuclear weapons.
The company receives 20.1 percent (USD 830 million) from the US
Government for its nuclear related government activities, including the
management of nuclear weapons and nuclear reactors (the company
manages the Los Alamos National Laboratory, which is in charge of the
assuring the safety of the US nuclear weapons stockpile). It is unclear
how much of these revenues precisely are weapons-related.
28 -40
Newmont Mining Corp
MSCI sector
Materials
Relevant principle(s)
Serious environmental damage
Company profile
Newmont Mining Corporation (Newmont) is the world's second largest
producer of gold with assets or operations in the United States,
Australia, Peru, Indonesia, Canada, Uzbekistan, Bolivia, New Zealand,
Ghana and Mexico. Mines also produce copper and silver; copper
production is principally through its Batu Hijau operation in Indonesia. In
2008, Newmont completed acquisition of Miramar Mining Corp in
Canada.
Relevant principle(s)
The many clashes with communities and several environmental cases in
Peru and Indonesia are clear examples of Newmont’s failure to ensure
that its overseas operations live up to expectations with regard to ESGmanagement. Furthermore, Newmont’s past involvement in countries
like Burma and Uzbekistan, but especially its present choice to continue
starting projects in protected or fragile areas does not create a view of
Newmont as a responsible investor.
29 -40
Northrop Grumman
Corp
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Northrop Grumman Corporation is a global defence and technology
company providing innovative systems, products, and solutions in
information and services, electronics, aerospace and shipbuilding to
government and commercial customers worldwide. The company is the
second largest defence contractor for the US military. Northrop
Grumman is active in four business areas: Information and Services,
Electronics, Aerospace and Shipbuilding. The company is with around
120,000 employees active in more than 100 facilities located throughout
the US.
Relevant principle(s)
Northrop Grumman Corporation has a contract to modernise and
sustain the nation's force of Minuteman III missiles through 2030. The
company manages the modernisation program for Intercontinental
Ballistic Missiles (ICBM), the PRP (Propulsion Renewal Program) for
replacement and the upgrading of rocket engines for Minuteman III.
ICBM is the main element of the US land based strategic nuclear
weapons.
30 -40
Raytheon Co
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Raytheon is a US defence corporation manufacturing defence systems
and defence and commercial electronics. Raytheon is the world's largest
producer of guided missiles and the fourth largest defence contractor in
the US by revenue. Raytheon maintains offices in 19 countries and has
established global companies to serve customers in the United
Kingdom, Australia and Canada. Production largely takes place in the
United States. The company has around 72,000 employees.
Relevant principle(s)
Raytheon produces the AGM154 Joint Standoff Weapon System
(JSOW) and the BLU-97 and BLU-108 sub-munition. The JSOW A
dispenses 145 BLU-97 combined effects bomblets. The JSOW B
dispenses six BLU-108 anti-armour sub-munitions. Raytheon produces
the BGM-109 Tomahawk. There are several variants of the BGM-109
Tomahawk with various types of warheads. The operational versions
include the conventional land attack TLAM-C, the bomblet-dispensing
land attack TLAM-D, the nuclear land attack TLAM-A and TLAM-N and
the Tomahawk Anti-Ship Missile. Raytheon is also producer of the AGM129A cruise missile armed with a nuclear warhead.
31 -40
Textron Inc
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Textron Inc. is a global, multi-industry company with operations in
aircraft, defence, industrial products, and finance. The Company's
products include airplanes, helicopters, weapons, and automotive
products. Textron's finance division offers asset based lending, aviation,
distribution, golf, and resort finance, as well as structured capital.
Textron employs around 43,000 people in 23 countries.
Relevant principle(s)
Textron is, together with Alliant Techsystems, developer and producer of
the XM-7 Spider system. This system consists of up to 84 control units
and a remote control station. Each unit can contain six individual
grenades, connected through a sensing network of tripwires. When the
tripwires are touched, the mine connected to the wires signals wirelessly
to the remote control station. The operator at the remote control station
can choose at that point to trigger one or a number of the grenades submunitions. The mine can be set to a ‘battle override’ mode that triggers
the mine as soon as any of the tripwires is touched, making it function
like a conventional anti-personnel mine. Textron produces the ‘smart’
cluster weapons known as CBU-97 and CBU-105 cluster bombs. These
bombs contain ten smaller sub-munitions of the type BLU-108, which
each contains four ‘smart’ warheads, giving a total of 40 bomblets. The
ten sub-munitions are equipped with a special technology, Sensor
Fuzed Weapon (SFW), which destroys movable and stationary targets
with minimal collateral damage. In contrast to traditional cluster
weapons, all the 40 bomblets are equipped with a mechanism that
makes them self-destruct in case they do not hit the target during the
attack. Textron therefore, claims that the problem of bomblets remaining
on the ground is non-existent. Given the unproven qualification of these
weapons as in fact ‘smart’ cluster weapons, SNS Asset Management
considers the CBU-97 and CBU-105 weapons as cluster bombs.
32 -40
United Technologies
Corp
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
United Technologies Corporation (UTC), a company based in the US,
develops, manufactures, and services building systems and aerospace
products through six operating divisions Carrier, Pratt & Whitney, Otis,
Hamilton Sundstrand, UTC Fire & Security, and Sikorsky. The company
also develops and markets distributed power generation systems,
including fuel cells, combined heat and power equipment, and micro
turbines through its UTC Power division. UTC had operations worldwide.
The company employs about 214,500 people in 62 countries.
Relevant principle(s)
UTC builds rocket motors for Intercontinental Ballistic Missiles (ICBMs)
(i.e. Titan and Minuteman III) leads to the conclusion that the company
is involved in the production of key components to nuclear weapons.
KLD reports that in FY 2007, UTC received USD 217.5 million in nuclear
weapons and weapons systems contracts from the US Government;
United Technologies builds rocket motors for Titan, Minuteman III,
Trident and Tomahawk cruise missiles. The Titan and the Minuteman III
are Intercontinental Ballistic Missiles (ICBMs), so nuclear weapons, and
the Trident and Tomahawk are capable of carrying both conventional
and nuclear warheads (dual-use).
In 2006, shareholders submitted a shareholder resolution asking UTC to
provide a comprehensive report of the company’s foreign sales of
weapons-related products and services. The company opposed the
resolution, stating that its public documents already provided extensive
information concerning foreign sales of military products and services.
33 -40
Goldcorp Inc
MSCI sector
Materials
Relevant principle(s)
Respect for human rights
Company profile
Goldcorp is the fastest growing gold producer engaged in gold and
copper mining and related activities including exploration, extraction,
processing and reclamation. It has operations in Argentina (Alumbrera
mine), Mexico (Luismin mine), Australia (Peak Gold mine), United States
(Wharlf gold mine) and several other projects in Mesoamerica, Canada
and Brazil. In December 2007, Goldcorp acquired Kinross Gold
Corporation's 49 percent interest in the Porcupine gold mines in north
eastern Ontario and its 32 percent interest in the Musselwhite gold mine
in north western Ontario in exchange for Goldcorp's 50 percent interest
in the La Coipa silver/gold mine in Chile. It has joint ventures with
Kinross Gold, Barrick Gold, Teck Cominco, Northern Orion, and Xstrata.
In February 2008, Goldcorp disposed of its 48 percent interest in Silver
Wheaton. Goldcorp employs about 9,000 people worldwide.
Relevant principle(s)
Goldcorp is facing allegations with regard to respecting human rights.
Local communities complain about cracked houses, contamination of
the area, and the lack of free, prior and informed consent of the
communities with regard to human rights impact assessments. Aim for
engagement is enlarging its social impact of the company in
Mesoamerican countries, especially while Goldcorp is planning several
new (short duration) operations in this area. More concrete engagement
targets should be community engagement and paying taxes. Honduras
in this respect will be an important focus while it is important that the
company does not misuse the present unstable situation, but it applies
to all Mesoamerican countries.
Conclusion
SNS Asset Management starts the dialogue with Goldcorp in order to
move the company towards the implementation of practices, policies
and procedures, and to make clear the impact of its operations on
human rights.
34 -40
Monsanto Co
MSCI sector
Materials
Relevant principle(s)
Child labour
Serious environmental damage
Company profile
Monsanto Company provides agricultural products for farmers on a
global basis. The company develops and manufactures herbicides for
large-scale and lawn and garden applications (58 percent), and
conventional and genetically modified seeds (42 percent). Monsanto
manages its business in two segments: Seeds and Genomics and
Agricultural Productivity. Monsanto employs almost 22,000 people.
Relevant principle(s)
Monsanto is subscribed to the principles of the American Chemistry
Council Responsible Care Program, the Responsible Care Global
Charter and the International Code of Conduct on the Distribution and
Use of Pesticides of the UN Food and Agriculture Organization. Despite
these commitments, there exist serious concerns about Monsanto’s
production of genetically modified seeds, toxic pesticides and its legacy
liabilities surrounding toxic waste dumping. Monsanto's genetically
modified seeds, particularly the crops that are engineered to resist the
herbicide Roundup, are considered to be very controversial. The
company received various claims for violating biotech regulations.
Together with the dioxin releases, toxic waste dumping and releases of
polychlorinated biphenyls (PCBs), it can be concluded that Monsanto's
business activities are causing substantial environmental damage. The
herbicides and other chemicals produced by Monsanto and the release
of these products in waterways and local properties have adversely
affected human. Furthermore, Monsanto has been systematically and
repeatedly involved in child labour through its suppliers in the cotton
seed belt in India.
Conclusion
Monsanto is taking measures, but currently their approach is insufficient
to avoid occurrence of similar situations in the future, and therefore,
SNS AM will engage with the company on the above-described issues.
35 -40
ST Engineering
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Singapore Technologies Engineering (STE) is a Singapore-based
holding company that provides engineering services for four sectors:
aerospace, electronics, land systems and marine. Its aerospace unit
offers engineering and maintenance services for military and commercial
aircraft, such as F-16 fighters. Land Systems provides integrated design
and engineering services for military vehicles, weapon systems and
munitions. The company's electronics unit designs communications,
transportation, simulation, microwave, and industrial electronic products.
The marine segment builds and repairs ships- primarily patrol, container
and military vessels. The company operates in Asia, the United States,
Europe and other countries and employs about 17,000 people
worldwide.
Relevant principle(s)
Singapore Technologies Kinetics, the defense company of Singaporebased holding company Singapore Technologies Engineering, is
involved in the production of cluster munition and delivery systems.
36 -40
Hanwa Corporation
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the production
of weapon systems
Company profile
Dedicated to the national economy, Korea Explosives Corporation was
founded in 1952 and successfully developed its own industrial
explosives production. Localization of the explosives accelerated the
reconstruction of the Korean economy after the Korean War. In 1993,
Korea Explosives Corporation changed the name as Hanwha
Corporation and diversified the business area into constructions, trades,
machinery, and pharmaceuticals in order to be a world business leader.
Relevant principle(s)
The South Korean company Hanwha Corporation produces various
forms of military equipment. The company produces the so-called
Aircraft Scattering Bomb and lightweight 70 mm MLRS-system, both
cluster weapons.
37 -40
Poongsan Corporation
MSCI sector
Capital Goods
Relevant principle(s)
Involvement in the
production of weapon
systems
Company profile
The South Korean company Poongsan Corporation focuses on
providing copper products and ammunition for South Korea and abroad.
The company supplies ammunition for tank, naval, recoilless, and
antiaircraft guns in the South Korean armed forces. Its copper and
copper alloy products include sheets and strips, pipes and tubes, rods,
wires, and bars. Poongsan also makes a variety of auto, shipbuilding,
and general machinery parts. Founded in 1968, the company operates
from six locations in South Korea and Taiwan. Poongsan plans to
expand its operations by establishing offices in China, Japan, Southeast
Asia, and the US. The company has about 3,300 employees.
Relevant principle(s)
Poongsan Corporation produces 155 mm artillery shells. The shell
designated DP-ICM TP is described as containing 88 bomblets, i.e.
small, explosive submunitions that characterize cluster munitions and
fall under the prohibition thereof contained in the Convention on Cluster
Munitions.
38 -40
Bridgestone
MSCI sector
Automobiles & Components
Relevant principle(s)
Child labour
Forced labour
Company profile
Bridgestone Corp., headquartered in Tokyo, is a major manufacturer of
tires for passenger cars, trucks, buses, and other wheeled vehicles.
Bridgestone owns the American tire brand Firestone. Tires (tires, tubes,
tire-related products, automobile services, and repairers) accounted for
about 80 percent of the group's 2006 worldwide revenues. In diversified
operations, the group's business spans industrial rubber and chemical
products, electro-materials, sporting goods, industrial machinery, and
bicycles. Bridgestone develops, manufactures and sells tires in over 150
countries worldwide, with sales to the Americas accounting for 44
percent, sales to Japan for 30 percent, and sales to Europe for 14
percent. Bridgestone has around 126,000 employees.
Relevant principle(s)
Bridgestone faces continued accusations of poor labour conditions, child
and forced labour use on rubber plantations.
Conclusion
The company will be engaged on the above mentioned issues.
39 -40
1 -40