In June 2024, United Nations experts including the Working Group on Business and Human Rights published a statement (the UN Expert statement) calling on investors and businesses to ensure they are not directly or indirectly involved in arms transfers to Israel or “risk responsibility for human rights violations”. The experts stated that in the current context, “continuing arms transfers to Israel may be seen as knowingly providing assistance for operations that contravene international human rights and international humanitarian laws and may result in profit from such assistance." We reached out to the 11 companies and 21 investors to ask for public information on how they achieve the minimum international standard of ‘heightened human rights due diligence’ in this war. We also invited four companies that were named in other reports for exporting arms to Israel.

According to the UN statement, "This risk is heightened by the recent decision from the International Court of Justice ordering Israel to immediately halt its military offensive in Rafah, having recognized genocide as a plausible risk, as well as the request filed by the Prosecutor of the International Criminal Court seeking arrest warrants for Israeli (alongside Hamas) leaders on allegations of war crimes and crimes against humanity."

Several civil society and media reports have also criticised arms companies for their continued relationship with Israel. According to the Palestinian Youth Movement (PYM) and People Dispatch, shipping company Maersk has played a vital role in the flow of weapons from the United States which are allegedly used in Israel's war on Gaza. These weapons allegedly include those manufactured by Northrup Gruman, Woodward, RTX/Raytheon and Lockheed Martin.

Al Jazeera reported that remnants of a missile that was used to carry out an attack on the United Nations-run al-Sardi school in central Gaza’s Nuseirat refugee camp, which killed at least 40 Palestinians, was manufactured by Honeywell. The report states 14 children and nine women were killed, with at least another 74 people wounded.

Non-profit news organisation Truthout reported remnants of bombs used in an attack on a camp of displaced Palestinians outside Rafah, which killed at least 45 and injured 240, were manufactured by Boeing.

Facing Finance and impACT International criticised Rheinmetall, claiming that the arms manufacturer risks contributing to human rights violations and violations of international humanitarian law through its weapon exports. Articles claim Rheinmetall avoids the German government’s arms export restrictions by exporting weapons through subsidiaries based in other countries.

In contrast, according to a report by Al Jazeera, Norway’s largest private pension fund KLP decided to divest from Caterpillar due to the alleged role of its equipment alleged in the construction of illegal settlements and other human rights violations by Israel’s armed forces in the West Bank and Gaza. Forensic Architecture, in a recent investigation, claims analysis of the vehicle in which Hind Rajab (a child) and her family were killed indicated that it was run over by a vehicle such as an Israeli military bulldozer made by Caterpillar.

Considering these allegations and the urgent call by the UN Experts, the Business & Human Rights Resource Centre invited the 21 investors and 11 companies named in the UN Expert statement, as well as an additional 4 arms companies with direct allegations against them, to respond and share information on their human rights due diligence practices.

Of these 36 firms, only four companies (BAE Systems, Maersk, Rolls-Royce Power Systems and thyssenkrupp) and three investors (Amundi Asset Management, Norges Bank Investment Management (NBIM), and Union Investment) responded.

Company responses:

The Resource Centre contacted BAE Systems, Boeing, Caterpillar, General Dynamics, Hensoldt, Honeywell, Lockheed Martin, Maersk, Northrop Grumman, Oshkosh, Rheinmetall, Rolls-Royce Power Systems, RTX Corporation, thyssenkrupp and Woodward to respond to the allegations and the call from the UN experts.

Of the 15 companies we invited to respond, only four companies responded. General Dynamics replied to our communication and declined to respond.

Maersk responded that it carries out human rights due diligence when operating in conflict-affected areas and applies standards and principles to ensure that the company does not carry out any shipments of weapons or ammunition to countries or areas currently involved in armed conflicts or that are subject to an arms embargo.

BAE Systems stated that the company operates under the tightest regulation and fully complies with all applicable defence export controls, subject to ongoing assessment.

Rolls-Royce responded that the company supports NATO and its allies in providing power solutions for defense purposes. In doing so, Rolls-Royce claims that the company abides by all applicable export control and sanctions laws.

thyssenkrupp responded that for the company “the laws and regulations of the Federal Republic of Germany are the decisive basis and benchmark for all economic activities."

Maersk noted that it is horrified by the humanitarian catastrophes in this conflict, while BAE Systems remarked that the situation in Israel and Gaza is having a devastating impact on civilians.

We also contacted 21 investors—Alfried Krupp von Bohlen und Halbach-Stiftung, Amundi Asset Management, Bank of America, Blackrock, Capital Group, Causeway Capital Management, Citigroup, Fidelity Management & Research, INVESCO, JP Morgan Chase, Harris Associates, Morgan Stanley, NBIM, Newport Group, Raven'swing Asset Management, State Farm Mutual Automobile Insurance, State Street Corporation, Union Investment, The Vanguard Group, Wellington Management, and Wells Fargo & Company—mentioned in the UN Expert statement to share information on heightened due diligence and efforts taken to stop their investee companies from transferring weapons to Israel.

Investor responses

Amundi Asset Management, NBIM and Union Investment provided robust responses, highlighting the importance of investor leadership on these issues:

Amundi outlined the measures it has taken regarding its investee companies' involvement in the transfer of arms, munitions, and military equipment to Israel. Amundi stated that it excludes issuers operating in certain weapons sectors. In conflict-affected contexts, Amundi states that it monitors controversial involvement and encourage companies to adopt heightened human rights due diligence. In addition, it stated that it engages with stakeholders and experts to develop recommendations for companies exposed to conflict-related risks. It added that if engagement does not yield satisfactory progress, escalation tools are applied, potentially leading to exclusion from portfolios.

NBIM states that it expects heightened human rights due diligence from companies operating in conflict-affected areas and has updated its expectations towards companies in conflict-affected and high-risk environments. It states it has engaged with 29 companies since 2020 about their human rights management, including those linked to the Occupied Palestinian Territories. The investor also states that beyond its ownership activities, the independent Council on Ethics for the Government Pension Fund Global evaluates the fund’s investments for alignment with ethical guidelines, leading to exclusions and observations of companies involved in serious violations.

Union Investments responded that based on ESG analyses, it excludes companies involved in manufacturing banned weapons from its investment universe (such as land mines and cluster bombs). Given that, subject to certain exceptions, its mutual funds must not hold securities of companies directly involved in the manufacture and maintenance of nuclear weapons systems, nor does it invest in such securities, the following companies listed in the UN Experts statement are excluded from their investment universe: BAE Systems, Boeing, General Dynamics, Lockheed Martin, Northrop Grumman and RTX. Union Investments also states that in case of grave violations, if a positive outcome is not possible, other companies may be excluded from investment. Furthermore, Union Investment shares that in its sustainable investment decisions, its applies the fundamental principle that the damage and suffering that can be caused by weapons makes securities of arms manufacturers ineligible for direct investment from an ESG perspective. Union Investment further states that it closely monitors developments in Gaza and adjusts its responsible investing strategies accordingly.

As of 17 July 2024 we received seven responses from companies and investors on this story. We will continue to post further responses as we receive them.