USCCB Socially Responsible Investment Guidelines - Part 4: Reducing Arms Production

The third area covered by the investment policies of the USCCB is "Reducing Arms Production".

Every country has a right and obligation to defend itself.  This right inevitably leads to the purchase of weapons.  Are weapons in themselves evil?  No.  They are merely tools.  So, why does the Church have this category altogether?  It is not so much concerned about the Church's stance on the morality of weapons, than its stance on the disproportionate amount of money spent on the military.  In 2010, the budget of the US Department of Defense was upwards of $500 billion dollars!  That is larger than the market capitalization of any company in the world!  Imagine dissolving a bit less than 2 Apples (the company) tomorrow, and taking all the shareholder value and putting it into military spending.  That would only last 1 year in the US.  What would happen if only 10% of that budget ($50 billion) was put to improving the lives of the poor?

Canadians are in a better position.  Our military spending is dwarfed by the US military spending, at roughly $20 billion per year.  Still, that is not a small number.  Imagine dissolving Rogers Communications...Let's look a little more closely.

The 2 sub-categories under this area are:

1. Production and Sale of Weapons
2. Antipersonnel Landmines

Production and Sale of Weapons

The USCCB's stance on the production or sale of weapons is twofold.  First, it will not invest in any company that derives its revenue primarily from the production of weapons.  Second, it will not invest in any company that develops weapons that is contrary to the Church's teaching on war, that is, weapons of indiscriminate, mass destruction.

A few of the larger defense contractors in the US include Lockheed Martin (Ticker: LMT), Northrop Grumman (Ticker: NOC) and Raytheon (Ticker: RTN).  Government expenditure in each of these companies are in the magnitude of billions of dollars.  Even without doing much research, it is not far fetched to think that these companies are major supplies of weapons or weapons related products.  Typically, you can find out a lot about a company's products in its Yahoo Finance profile page.  That would be a place with which I would start my research.  Just reading the Lockheed Martin profile page was enough to turn me away from that company.

The first was easy to detect; the second, not so much.  Companies that develop weapons of mass destruction would likely not advertise that they're doing such work.  It's best to avoid all companies that develop or manufacture arms.

Antipersonnel Landmines

The use of landmines is similar to weapons of mass destruction.  The device will not care whether a soldier or a 4-year old boy steps on it, it will activate when anyone steps on it.  Indiscriminate landmines have since been banned by the Ottawa Treaty.  They're really just a specialized form of weapons.  So, if you already avoided arms manufacturers, you'd be pretty safe.

Conclusion

Conclusion is simple: avoid defense contractors and avoid weapons manufacturers.  If you do get into aerospace companies, be very vigilant as some are also involved with building fighter jets or components for them.  I'm not saying these are necessarily bad, but you would need to investigate and make a judgment call.  Better to stay away than to be ignorant.