Cluster munitions are weapons that contain multiple explosive submunitions. Cluster munitions typically open in mid-air and release submunitions that can cover a wide area, causing widespread and indiscriminate harm and damage. While submunitions generally explode in the air or on impact, any that do not explode can present a danger to civilians long after the weapon has been fired. Landmines are devices placed on or just under the ground, designed to explode when a person is nearby or steps on the device. They can pose a threat for many years after they are placed. Cluster munitions and landmines kill and injure large numbers of civilians and cause long lasting socio-economic problems.
There are two major international conventions that address cluster munitions and landmines. These are as follows:
The 2008 Convention on Cluster Munitions prohibits the use, production, stockpiling and transfer of cluster munitions and requires states to ensure that they claim no further victims.
The Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on Their Destruction (1997) aims to eliminate anti-personnel landmines around the world.
In line with these international conventions and following their ratification into domestic law by a number of countries, Adelio Partners Limited has adopted a policy which commits it to avoiding direct investments in companies that:
Design, produce, sell or maintain cluster munitions and/or landmines
Undertake research and development to develop cluster munitions and/or landmines
Breach the requirements of the Convention on Cluster Munitions or the Anti-Personnel Landmines Convention
This policy applies across all investment types except passive holdings in index-tracking instruments.
We maintain a cluster munition and landmine exclusion list which is a list of companies that are excluded from our investment universe. The list is compiled based on information provided by third-party sources. Our principal data source is an NGO, Cluster Munition Coalition (CMC), and its affiliated national bodies. One affiliate, Netherlands-based PAX, produces an annual report of worldwide investments in cluster munitions. The report includes a “red flag” list of companies that produce cluster munitions. The Firm also reviews additional data sources, including Bloomberg, Internet searches and research into environmental, social and governance (ESG) factors. Each data source is assessed according to its credibility, timeliness, and research process. The exclusion list considers publicly available data provided freely by various groups, firms and other independent bodies to enhance the scope of our restricted company list.
The exclusion list generated internally is checked before any investments are made and the list is refreshed on an annual basis. If we identify a company in our portfolios that does not comply with these policy requirements, we will contact the company directly for confirmation of their involvement in cluster munitions or landmines-related activities. Following confirmation of their involvement in these activities, we will divest any such holdings within a reasonable period.