Australian superannuation funds face reputational, fiduciary and regulatory risks through exposure to companies associated with the production or maintenance of nuclear weapons.


The United Nations Treaty on the Prohibition of Nuclear Weapons (TPNW) entered into force in January 2021. The treaty makes nuclear weapons illegal, just like chemical and biological weapons, cluster munitions, and landmines.

Current status

Most Australian superannuation funds acknowledge the reputational, fiduciary and regulatory risks of exposure to controversial weapons, but many funds are yet to update their policies or ESG screens to avoid exposure to companies to companies associated with the production or maintenance of illegal nuclear weapons (nuclear weapons companies). 

key considerations


Investments in nuclear weapons companies do not meet community standards.

In Australia 71-79% of people agree that the government should sign and ratify the UN Treaty on the Prohibition of Nuclear Weapons (Ipsos 2018, 2020), while 69% agree or strongly agree that their superannuation fund should not invest in nuclear weapons companies, and only 7% disagree. (Ipsos 2019).

PRI signatories claiming to ‘avoid harm’ may be misrepresenting exposure to nuclear weapons.



Globally, major investors are limiting their exposure to nuclear weapons activities.

Two of the top five pension funds in the world, the Norwegian Government Pension Fund and ABP, have divested from nuclear weapons. Most recently the Irish Sovereign Wealth Fund has divested. Deutsche Bank and KBC are also divesting.

In Japan, 16 banks (including 3 mega banks; MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corp) have flagged ceasing investment in nuclear weapons companies.

Nuclear weapons-related investments have shown long-term under-performance and may further deteriorate as divestment gains momentum. Broader trends indicate sector downturn in the wake of prohibition by international treaty, even in non-signatory countries.

The MSCI ESG Screened indices, which exclude nuclear weapons, have outperformed the comparable MSCI Indices since their inception in 2012 (see our briefing paper).

Companies recommended for exclusion are international companies and represent a very small proportion of Australian fund portfolios, limiting material risk.

Nuclear weapons companies face an uncertain regulatory future and have potential long-tail liabilities.



Since January 2021, international law comprehensively prohibits assistance to companies involved in nuclear weapons production and associated activities.

States parties to the TPNW are required to divest any government money – such as sovereign funds – from nuclear weapons companies.

APRA has expressed interest regarding stress testing for a nuclear event scenario (not unlike stress testing for a pandemic) as part of due diligence requirements.

All portfolios are exposed to the catastrophic human and climate impacts of a nuclear event while nuclear weapons continue to exist.

Over 80 federal parliamentarians have pledged support for the TPNW.

The federal Opposition, the Australian Labor Party, has made a policy commitment to sign and ratify the TPNW in government.

Some Australian funds hold nuclear weapons companies despite their PDS claiming exclusion. Non-standardised application of controversial weapons definitions and exclusions, and low levels of transparency may also be a regulatory risk.


Recommended policy

We recommend superannuation funds adopt a policy that:

1. Excludes all nuclear weapon associated companies:

Whole companies, not only nuclear weapons related projects

Companies associated with nuclear weapons including through joint ventures;

Companies regardless of their country of origin;

Companies regardless of their country of operation.

2. Excludes all nuclear weapon associated activities:

Development, testing, production, maintenance or trade of nuclear weapons related technology, parts, products or services;

Delivery systems such as missiles that are specifically developed for nuclear tasks. It does not include delivery platforms such as bombers and submarines.

3. Applies the policy to all of the institution’s products and services. The institution applies the policy:

For the entire group, including subsidiaries;

In all markets;

To all asset management classes – passive and active, internal and external;

To all existing and future investments.

Funds with existing fund-wide controversial weapons policies should add nuclear weapons to their exclusions.

Funds without fund-wide controversial weapons policies should act to adopt a policy that excludes nuclear weapons.