Etica SGR at UN Conference on Nuclear Weapons: A Conversation with President Marco Carlizzi

From November 27th to December 1st, the United Nations headquarters in New York will host the 2nd Meeting of States Parties to the Treaty on the Prohibition of Nuclear Weapons (TPNW). This treaty, which came into effect on January 22, 2021, marks a historic turning point by establishing an unequivocal global ban on the use and testing of nuclear weapons.

In this globally significant context, we had the privilege of interviewing Marco Carlizzi, President of Etica SGR. He will attend the New York conference this afternoon, presenting the updated version of the treaty, already endorsed by over 90 international financial institutions. Our discussion delves into the role and perspectives of the company in this crucial and global etical landscape.

Why did you decide to participate again in the Conference of States Parties to the Treaty on the Prohibition of Nuclear Weapons?

For us at Etica SGR, it was a 'mandatory' choice, as disarmament promotion is integral to our identity. After all, Etica SGR – a management company within the Banca Etica Group – was born 23 years ago in line with pacifist movements rooted in non-violence. Etica SGR's mission is to embody the values of ethical finance in financial markets, raising awareness among the public and financial operators about socially responsible investments and corporate social responsibility. We exclude any controversial sector that does not align with sustainability criteria. Thus, it is inherent in our mission to abstain from any financing in the arms industry, as it can never have a positive social impact according to our principles.

Can you give us a preview of the topics Etica SGR will address during your intervention?

Etica SGR will present itself as a responsible and active investor, aiming to engage and raise awareness among other players in the financial world, building on the groundwork laid during last year's inaugural Vienna Conference. We will emphasize the importance of all countries joining the Treaty, urging States Parties to request that state-owned enterprises, including central banks and sovereign funds, fully integrate the ban outlined in the Treaty on the Prohibition of Nuclear Weapons concerning all forms of assistance. Additionally, we will call for States Parties to ensure that the Treaty's obligations extend to non-state actors (including the private sector) within their jurisdictions. Lastly, we will seek a specific commitment not to finance or invest in companies producing key components for nuclear weapons, prioritizing community health, climate, and democratic institutions over profits in the nuclear weapons industry.

What concrete results does Etica SGR aim to achieve this year through its participation in the Conference?

Despite the challenges, we aspire to attain tangible outcomes. By presenting an updated version of the Investor Statement introduced last year in Vienna, our goal is to achieve a significant impact and engagement. The number of signatories has notably increased this year, from the 37 in last year's Statement to over 90 today. Among them are American asset managers deeply committed to sustainability, religious investors, pension funds, and major European investors. While this engagement is already a concrete objective, this year we aim to complement it with a second goal: raising even more awareness among savers. Through their investment choices and allocation of savings, they can influence and push governments to make more meaningful decisions on the issue of nuclear weapons.

Last year, Etica SGR had already presented an Investor Statement jointly crafted with ICAN – the International Campaign to Abolish Nuclear Weapons. Could you explain to readers what it entailed?

The 2022 Statement specifically called on States Parties with the objective not only to rigorously implement the Treaty in national legislation, ensuring the exclusion of any investment in nuclear weapons for public investors operating within the jurisdiction, including central banks and national investment banks but also to implement the Treaty's prohibition for any non-state actor and private management companies (both national and international) operating within their jurisdiction.

How do you assess the impact of the Investor Statement now that a year has passed since its presentation?

Certainly, we have observed a positive impact, considering the increased awareness on the issue within the financial world and the substantial growth in the number of treaty signatories this year. However, significant challenges persist, stemming not only from the current geopolitical context but also from the fact that possession and production of weapons, nuclear and otherwise, create strong relationships among states. Often, defense spending forms the core of the foreign policy for many countries.

How do you foresee the financial sector evolving to support initiatives like this? And what are the long-term financial implications for investors?

What I can assert with certainty is that making predictions in finance is challenging. While there is a high level of attention to ESG issues in Europe, which pushes towards the path of disarmament, the global situation is much more varied. We hope for an increase in awareness and greater attention from savers and fund subscribers to make a financial choice 'against weapons.' In the long term, the focus should be on the transition toward investments that are more just for the community and the planet, ultimately having a positive impact.

How does Etica SGR involve investors in promoting nuclear disarmament?

We collaborate closely with a network of organizations dedicated to this cause. Etica SGR works with ICAN (International Campaign to Abolish Nuclear Weapons), a Swiss organization awarded the Nobel Peace Prize in 2017. ICAN's mission is to mobilize global civil society to support the negotiation of a comprehensive global treaty banning nuclear weapons. Italian partners of ICAN, with whom we collaborate, include Senzatomica and Rete Italiana Pace e Disarmo. For instance, in 2016, we supported the mobilization "Italy, reconsider," promoted by Senzatomica and Rete Italiana Pace e Disarmo, urging the Italian Government to find ways to join the Treaty on the Prohibition of Nuclear Weapons.

What key message would Etica SGR like to convey to investors and the public at large regarding nuclear disarmament?

It is now widely acknowledged that the production, sale, and use of nuclear weapons lead to severe social consequences, with high and enduring risks for society. Therefore, from an ethical standpoint, there are only disadvantages. Economically, even the slightest threat of the use of these weapons can shake financial markets, increasing volatility and negatively impacting the overall performance of investors' portfolios. In the event of actual use, the economic repercussions would be devastating, with significant social damage and a collapse of financial markets across all sectors and asset classes.