Cbus Super Reviews Investment Policy Amid Pressure to Divest from Israel Weapons Suppliers

Cbus Super, Australia's largest pension fund, is reviewing its investments in companies supplying weapons to Israel following pressure from the CFMEU union. The review comes amid community concern over the recent conflict in Gaza and the fund's potential role in promoting ethical practices.

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Nitish Verma
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Cbus Super Reviews Investment Policy Amid Pressure to Divest from Israel Weapons Suppliers

Cbus Super Reviews Investment Policy Amid Pressure to Divest from Israel Weapons Suppliers

Australia's largest pension fund, Cbus Super, is reviewing its investments, urgently following pressure from the Construction, Forestry, Maritime and Energy Union (CFMEU) to divest shares in companies supplying weapons to Israel. The CFMEU, a sponsor of Cbus, has urged the fund to sell its holdings in Lockheed Martin and RTX Corporation, citing community concern over the recent conflict in Gaza.

Why this matters: The review of Cbus Super's investment policy has broader implications for the role of institutional investors in promoting ethical practices and respecting human rights. It also raises questions about the responsibility of companies and governments to ensure that their activities do not contribute to human suffering or violations of international law.

Zach Smith, CFMEU national secretary, stated, "We've told Cbus in no uncertain terms it must urgently divest of all shares in companies like Lockheed Martin and Raytheon/RTX." The union argues that "industry super funds should not be funding genocide" and has called on the Australian Labor Party (ALP) government to stop allowing parts for F-35 fighter jets to be sent to Israel.

Cbus Super, which manages approximately $1.3 trillion in retirement savings, will have its investment committee meet next week to consider the concerns raised by the CFMEU. A Cbus spokesperson acknowledged the community concern, stating,"We acknowledge the community concern over the conflict and loss of life in Gaza and Israel. "They added,"However, we understand that even a small holding in the current climate may cause concern."

The investments identified by the CFMEU equate to approximately 0.01% of Cbus's total funds under management. While Cbus already excludes investments in companies directly involved in certain controversial weapon manufacturing, it has not historically excluded conventional weapons. Lockheed Martin stated it is "proud of the significant role it has fulfilled in the security of the state of Israel," while RTX Corporation maintains it complies with US laws and export regulations.

The Australian government has not approved the export of any weapons to Israel for at least the past five years, but defence officials confirmed they did not classify components, such as parts for F-35 aircraft, as weapons. The review of Cbus's investment policy comes amid mounting international pressure over Israel's military operations in Gaza, which the Israeli government maintains are a legitimate response to Hamas's attacks. Critics, including the CFMEU, argue that Israel is committing genocide against Palestinians in Gaza, though the international court of justice has yet to make a substantive ruling on the allegations.

The international court of justice said in an interim ruling in January that the genocide claims were "plausible" and ordered Israel to take all steps to prevent genocidal acts and incitement. As Cbus Super's investment committee prepares to meet and consider the CFMEU's concerns, the debate over the ethics of investing in companies supplying weapons to Israel amid the ongoing conflict in Gaza continues to intensify.