STATE-OF-THE-ART REPORT

Contents

Executive Summary, Recommendations and Methodology 8

Summary Tables 19

Introduction 30

Investing in Cluster Munitions: What's at Stake? 30 Cluster Munitions and the Oslo Process 30 Financial Institutions' Power and Responsibility 31 Our Research 32

Chapter 1 Hall of Shame: Financial Involvement and Investments 33

1.1 Red Rag List of Cluster Munitions Producers 33 1.1.0 Introduction and Methodology 33 1.1.1 ATK (United States) 35 1.1.2 Aerospace Science and Technology (China) 36 1.1.3 Hanwha () 36 1.1.4 Norinco (China) 38 1.1.5 Poongsan (South Korea) 38 1.1.6 Singapore Technologies Engineering (Singapore) 39 1.1.7 Text ron (United States) 39

1.2 The Investments 42 1.2.0 Introduc tion and Methodology 42 1.2.1 Aberdeen Asset Management (United Kingdom) 44 1.2.2 Affiliated Managers Group (United States) 44 1.2.3 Aflac (United States) 44 1.2.4 Agricultural (China) 45 1.2.5 AJO (United States) 45 1.2.6 Allianz () 45 1.2.7 Allstate Corporation (United States) 46 1.2.8 Amalgamated Bank of Chicago (United States) 46 1.2.9 American Beacon Advisors (United States) 46 1.2.10 American International Group (United States) 46 1.2.11 American United Mutual Insurance (United States) 47 1.2.12 Ameriprise Financial (United States) 47 1.2.13 APS Asset Management (Singapore) 47 1.2.14 Arovid Associates (United States) 47 1.2.15 Associated Banc-Corp (United States) 48 1.2.16 Banco de Sabadell (Spain) 48

1.2.17 BancPlus (United States) 48 1.2.18 Bank Hapoalim (Israel) 4g 1.2.19 (United States) 48 1.2.20 Bank ofBeijing (China) 49 1.2.21 Bank of China (China) 50 1.2.22 Bank of Communications (China) 50 1.2.23 Bank of Fast Asia (China) 51 1.2.24 Bank of New York Mellon (United States) 5]

2 1.2.25 Banner Bank (United States) 52 1.2.26 BB&T (United States) 52 1.2.27 BlackRock (United States) 52 1.2.28 California First National Bancorp (United States) 52 1.2.29 Capital Group (United States) 53 1.2.30 Carlyle Croup (United States) 53 1.2.31 Cascade Bancorp (United States) 53 1.2.32 Causeway Capital Management (United States) 53 1.2.33 Central Pacific Financial Corporation (United States) 54 1.2.34 Cheonanbukil Foundation School (South Korea) 54 1.2.35 China Construction Bank (China) 54 1.2.36 China Development Bank (China) 54 1.2.37 China Everbright Croup (China) 55 1.2.38 China Life Insurance (China) 55 1.2.39 China Merchants Bank (China) 55 1.2.40 China Minsheng Bank (China) 56 1.2.41 China Securities (China) 56 1.2.42 CITIC Croup (China) 56 1.2.43 Citigroup (United States) 57 1.2.44 CNO Financial (United States) 57 1.2.45 Comerica (United States) 58 1.2.46 Consus Asset Management (South Korea) 58 1.2.47 Credit Mutuel (France) 58 1.2.48 Credit Suisse (Switzerland) 58 1.2.49 Securities (South Korea) 59 1.2.50 Davis Advisors (United States) 59 1.2.51 DBS (Singapore) 59 1.2.52 (Germany) 59 1.2.53 Dimensional Fund Advisors (United States) 60 1.2.54 Discovery Capital Management (United States) 60 1.2.55 Dongbu Group (South Korea) 60 1.2.56 E.SUN Financial (Taiwan) 60 1.2.57 Eastern Bank (United States) 61 1.2.58 Eaton Vance (United States) 61 1.2.59 Eugene Investment & Securities (South Korea) 61 1.2.60 Fidelity Investments (United States) 62 1.2.61 Fidelity Worldwide Investment (United Kingdom) 62 1.2.62 Fifth Third Bancorp (United States) 62 1.2.63 First Eagle Investment Management (United States) 63 1.2.64 First Niagara Financial (United States) 63 1.2.65 Fubon Group (Taiwan) 63 1.2.66 Gamco Investors (United States) 63 1.2.67 Genworth Financial (United States) 63 1.2.68 Goldman Sachs (United States) 64 1.2.69 Grantham, Mayo, Van Otterloo & Co. (GMO) (United States) 64 1.2.70 Croupe BPCE (France) 65 1.2.71 Guotai Junan Securities (China) 65 1.2.72 Haitong Securities (China) 65 1.2.73 Hana Financial (South Korea) 65 1.2.74 (South Korea) 66 1.2.75 Hanyang Securities (South Korea) 67 1.2.76 Hartford Financial Services (United States) 67 1.2.77 Hong Yuan Securities (China) 67

3 1.2.78 Hua Nun Financial (Taiwan) 1.2.79 (South Korea) 67 1.2.80 Hyundai Heavy Industries (South Korea) 68 1.2.81 Industrial Bank (China) 68 1.2.82 Industrial & Commercial Bank of China (ICBC) (China) 68 1.2.83 Invesco (United Kingdom) 69 1.2.84 JP Morgan Chase (United States) 69 1.2.85 KB Financial (South Korea) 70 1.2.86 KDB Financial Group (Sout h Korea) 71 1.2.87 Keycorp (United States) 72 1.2.88 Knights of Columbus (United States) 72 1.2.89 Korea Investment Holdings (South Korea) 72 1.2.90 Land Bank of Taiwan (Taiwan) 73 1.2.91 LSV Asset Management (United States) 73 1.2.92 Macquarie Group () 73 1.2.93 MassMutual Financial (United States) 74 1.2.94 Matthews International Capital Management (United States) 74 1.2.95 MetLife (United States) 74 1.2.96 Mirae Asset Financial Group (South Korea) 75 1.2.97 Mitsubishi UFJ Financial () 75 1.2.98 Mi/.uho Financial (Japan) 76 1.2.99 Morgan Stanley (United States) 76 1.2.100 National Pension Service (South Korea) 76 1.2.101 Nationwide (United States) 77 1.2.102 Neuberger Berman (United States) 77 1.2.103 New York Life Insurance Company (United States) 77 1.2.104 Northern Trust (United States) 77 1.2.105 Old Mutual (United Kingdom) 78 1.2.106 Oversea-Chinese Banking Corporation (Singapore) 78 1.2.107 People's Insurance Company (Group) of China (PICC) (China) 78 1.2.108 People's United Financial (United States) 78 1.2.109 PNC Financial (United States) 79 1.2.110 Point 72 Asset Management (United States) 79 1.2.111 Prudential (United Kingdom) 80 1.2.112 Prudential Financial (United States) 80 1.2.113 Raymond James Financial (United States) 80 1.2.114 Regions Financial (United States) 80 1.2.115 Royal Bank of Canada (Canada) 81 1.2.116 Group (South Korea) 81 1.2.117 Schröders (United Kingdom) 81 1.2.118 Sealand Securities (China) 82 1.2.119 Shenyin & Wanguo Securities (China) 82 1.2.120 Shinhan Financial Group (South Korea) 82 1.2.121 Shinyoung Asset Management (South Korea) 83 1.2.122 Siemens Financial Services (Germany) 83 1.2.123 SK Securities (South Korea) 83 1.2.124 Standard Life (United Kingdom) 84 1.2.125 State Bank of India (India) 84 1.2.126 State Street (United States) 84 1.2.127 Stifel Financial (United States) 84 1.2.128 Sumitomo Mitsui Financial Group (Japan) 85 1.2.129 Sun Life Financial (Canada) 85 1.2.130 SunTrust Bank (United States) g6

4 1.2.131 Synovus Financial Corporation (United States) 86 1.2.132 T. Rowe Price (United States) 86 1.2.133 Temasek Holdings (Singapore) 87 1.2.134 The London Company ofVirginia (United States) 87 1.2.135 The Travelers Companies (United States) 87 1.2.136 Teachers Insurance & Annuity Association (TIAA-CREF) (United States) 87 1.2.137 Trimaran Capital Partners (United States) 88 1.2.138 Truston Asset Management (South Korea) 88 1.2.139 Two Sigma Investments (United States) 88 1.2.140 UBS (Switzerland) 89 1.2.141 Union Bancaire Privee (Switzerland) 89 1.2.142 Unum Group (United States) 89 1.2.143 US Bancorp (United States) 89 1.2.144 Vanguard (United States) 90 1.2.145 Wellington Management (United States) 91 1.2.146 (United States) 91 1.2.147 Western & Southern Mutual (United States) 92 1.2.148 William Blair & Company (United States) 92 1.2.149 Williams Capital (United States) 92 1.2.150 Woori Financial (South Korea) 92 1.2.151 Yurie Asset Management (South Korea) 93

Chapter 2 Disinvesting from Cluster Munitions Producers 94

2.1 Hall of Farne: Financial institutions pioneering in disinvestment 94 2.1.0 Introduction and Methodology 94 HTHICAL BANKS 96 2.1.1 ASN Bank (the Netherlands) 96 2.1.2 Banca Etica (Italy) 96 2.1.3 La Financiere Responsable (France) 97 2.1.4 Triodos Bank (the Netherlands) 97 GOVERNMENT-MANAGED PENSION FUNDS 98 2.1.5 Fonds de Compensation (Luxembourg) 98 2.1.6 The Future Fund (Australia) 99 2.1.7 Norwegian Government Pension Fund - Global (Norway) 99 2.1.8 Swedish Pension Funds API-4 (Sweden) 100 2.1.9 Swedish Pension Fund AP7 (Sweden) 100 MAINSTREAM FINANCIAL INSTITUTIONS (private) 101 2.1.10 ABP (the Netherlands) 101 2.1.11 APG (the Netherlands) 101 2.1.12 A.S.R. (the Netherlands) 102 2.1.13 ATP (Denmark) 102 2.1.14 BPF Bouw (the Netherlands) 102 2.1.15 The Co-operative Bank (United Kingdom) 103 2.1.16 Delta Lloyd Group (the Netherlands) 103 2.1.17 DNB (Norway) 104 2.1.18 Folksam (Sweden) 104 2.1.19 KLP (Norway) 104 2.1.20 Laegernes Pensionskasse (Denmark) 105 2.1.21 Menzis (the Netherlands) 105 2.1.22 PenSam (Denmark) 105 2.1.23 Pensioenfonds Horeca & Catering (the Netherlands) 106 2.1.24 Pensioenfonds Zorg en Welzijn (the Netherlands) 106

5 2.1.25 PI A Pension (Denmarlc) 107 2.1.26 PGGM (the Netherlands) 107 2.1.27 Philips Pension Fund (the Netherlands) 107 2.1.28 PME (the Netherlands) 108 2.1.29 PNO Media (the Netherlands) 108 2.1.30 SNS REAAL (the Netherlands) 108 2.1.31 Sparinvest (Luxembourg) 109 2.1.32 Spoorwegpensioenfonds (the Netherlands) 109 2.1.33 SPW (the Netherlands) 110 2.1.34 Stichting Pensioenfonds Huisartsen (the Netherlands) 110 2.1.35 Stichting Pensioenfonds Openbaar Vervoer (the Netherlands) 111 2.1.36 Storebrand Group (Norway) 111

2.2 Runners-up Financial Institutions 112 2.2.0 Introduction and Methodology 112 2.2.1 ARN Amro (the Netherlands) 114 2.2.2 Actinica (the Netherlands) 114 2.2.3 Aegon (the Netherlands) 115 2.2.4 Aviva (United Kingdom) 115 2.2.5 AXA (France) 116 2.2.6 (United Kingdom) 116 2.2.7 BBVA (Spain) 117 2.2.8 Belfius (Belgium) 117 2.2.9 BNP Paribas (France) 118 2.2.10 (Gennany) 118 2.2.11 Credit Agricole (France) 119 2.2.12 Credit Suisse (Switzerland) 119 2.2.13 (Denmark) 120 2.2.14 Deutsche Bank (Germany) 121 2.2.15 Ethias (Belgium) 121 2.2.16 Generali (Italy) 122 2.2.17 HSBC (United Kingdom) 122 2.2.18 ING (the Netherlands) 123 2.2.19 (Italy) 123 2.2.20 KBC (Belgium) 124 2.2.21 (United Kingdom) 124 2.2.22 National Pensions Reserve Fund (Ireland) 125 2.2.23 National Providern Fund (New Zealand) 125 2.2.24 New Zealand Superannuation Fund (New Zealand) 126 2.2.25 NIBC (the Netherlands) 126 2.2.26 (Sweden) 127 2.2.27 Nykredit (Denmark) 127 2.2.28 Pensioenfonds Vervoer (the Netherlands) 128 2.2.29 (the Netherlands) 128 2.2.30 Royal Bank of Canada (Canada) 129 2.2.31 Royal (United Kingdom) 129 2.2.32 SEB (Sweden) 130 2.2.33 Societe Generale (France) 130 2.2.34 (United Kingdom) 131 2.2.35 Stichting Pensioenfonds APF (the Netherlands) 131 2.2.36 Sumitomo Mitsui Trust Bank (Japan) 132 2.2.37 Swedbanlc (Sweden) 132 2.2.38 Group (Italy) 133

6 2.2.39 Van I.anschot (the Netherlands) 133 2.2.40 Vontobel (Switzerland) 134

2.3 Countries' Best Practices 137 2.3.0 Introduction and Methodology 137 DISINVESTMENT - LEGISLATION 138 2.3.1 Belgium 138 2.3.2 Ireland 141 2.3.3 Italy 143 2.3.4 Liechtenstein 144 2.3.5 Luxembourg 146 2.3.6 The Netherlands 148 2.3.7 New Zealand 150 2.3.8 Samoa 152 2.3.9 Switzerland 153 DISINVESTMENT - MINISTERIAL AND INTERPRETIVE STATEMENTS 156 2.3.10 Australia 156 2.3.11 Bosnia and Herzegovina 156 2.3.12 Cameroon 156 2.3.13 Canada 156 2.3.14 Colombia 157 2.3.15 Congo, the Democratic Republic of 157 2.3.16 Congo, the Republic of 157 2.3.17 Croatia 158 2.3.18 The 158 2.3.19 France 158 2.3.20 Ghana 159 2.3.21 Guatemala 159 2.3.22 The Holy See 159 2.3.23 Hungary 159 2.3.24 LaoPDR 159 2.3.25 Lebanon 160 2.3.26 Madagascar 160 2.3.27 Malawi 160 2.3.28 Malta 160 2.3.29 Mexico 161 2.3.30 Niger 161 2.3.31 Norway 161 2.3.32 Rwanda 162 2.3.33 Senegal 162 2.3.34 Slovenia 162 2.3.35 The United Kingdom 162 2.3.36 Zambia 163 INVESTMENT - PARLIAMENTARY INITIATIVES/DRAFT LEGISLATION 163

Conclusion and recommendations 164

Appendix 1 Glossary 165

Appendix 2 References 167

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