The Group also warns of reputational and regulatory risks for companies in the defense industry.
This week, 24 UN PRI signatories (Principles for Responsible Investment Initiative is a network of international investors ) with over US$ 1.2 trillion in assets under management called for a strong, legally binding and comprehensive Arms Trade Treaty (ATT).
This message comes as United Nations member states negotiate the ATT at the UN Headquarters in New York City. This group has issued a statement highlighting the need for the establishment of common international standards on the transfer of conventional arms.
Signatories to the statement feel that the ATT is directly relevant to the long-term financial interests of investors as the irresponsible supply of conventional weapons can increase conflicts, thereby contributing to political instability, insecurity and lower economic growth, specifically in emerging economies.
Investors believe that member states have an historic opportunity to set out commonly-agreed rules for strict national regulation and international monitoring to fight corruption, and prevent arms export and transfers that may contribute to violations of international human rights and humanitarian law.
Investors view the ATT as a risk-reduction mechanism for arms producers to help prevent corporate complicity in human rights and humanitarian law violations. Without a stronger global conventional arms control system, there are clear regulatory and reputational risks for companies in the defense industry.