Colonial First State supports call for controversial weapons removal from global indices

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Colonial First State taking steps to support global action on responsible investment issues.

Colonial First State has confirmed its support for an open letter from institutional investors calling on index providers to remove controversial weapons from global indices.

Colonial First State is one of the first Australian companies to join 142 other institutional investors, representing US$6.9 trillion in assets, who are calling for the exclusion of controversial weapons from global investment indices. These weapons include anti-personnel mines, cluster munitions, biological and chemical weapons, and nuclear weapons.

Colonial First State’s Head of Investments, Scott Tully said: “Becoming a signatory to the open letter is yet another step we are taking to support global action on responsible investment issues.

“Together with other asset owners, we are in a position to make a huge difference to responsible investing, which we know is something many of our members value. We believe that active and passive investments should, by default, exclude controversial weapons.”

Signatories to the open letter believe that the exclusion of controversial weapons will better align their clients’ investments with what has become standard practice and expectation among investors. While companies involved in the manufacturing of controversial weapons account for a marginal weight of global equity and fixed income indices, the growing interest in passive investing means many investors are inadvertently investing in that industry by following the composition of the standard indices.

“Responsible investment is a matter of stewardship and we continue to collaborate with external parties to deliver meaningful change throughout the investment value chain,” added Mr Tully.

The letter, released on 12 February Sydney time (11 February Zurich time), will be sent to the CEOs and Chairpersons of all major index providers as well as the Index Industry Association.

Colonial First State remains on track to complete its own divestment from controversial weapons manufacturers by the end of this year. Colonial First State is a signatory to the Principles for Responsible and recently became a signatory to the United Nations endorsed Tobacco-Free Finance Pledge.

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