Russia is conducting a war of aggression that contravenes international law

Union Investment prohibits purchase of Russian government bonds and state-backed Russian issuers

What has happened?

In the early hours of Thursday, 24 February 2022, the situation in eastern Europe deteriorated drastically from a security perspective. In an address to the public, Russia’s President Vladimir Putin announced that he had given the order for military action in Ukraine. The Kremlin thus escalated the situation and crossed the line into military conflict within a week of recognising the separatist ‘people’s republics’ of Luhansk and Donetsk.

What is our view of events?

The ESG committee regards the Russian military operation in Ukraine as a war of aggression that contravenes international law. Russian exports and the revenue of state-backed companies are underpinning the aggression as they are helping to finance the attacks. We do not want to support this.

What steps have we taken?

Russian government bonds were excluded from our ESG mutual funds quite some time ago, and Belarusian government bonds are excluded from all mutual funds.

We have now decided to prohibit the purchase of any securities of the Russian government and various state-backed Russian issuers for our mutual funds and all other actively managed portfolios. This ban covers both the primary market and the secondary market and applies until further notice. By taking this step, we are making sure that the assets that we manage are not misappropriated in order to finance the war in Ukraine.

When do the decisions come into force?

The purchase ban takes effect immediately. It may be amended at any time and at short notice depending on the latest developments (e.g. with regard to changes to, or clarification of, the list of sanctions imposed by the US and EU).

What are the next steps?

Our next step is to review all state-backed Russian issuers. The aim of this review is to quantify the links between companies and the financing of/involvement in the Russian military action and also to quantify the extent of this financing/involvement. If appropriate, we will broaden the purchase ban. Depending on the outcome of the review, we may strengthen our exclusion signals as well.

We are also closely monitoring the political and regulatory debate in Germany and in Europe as a whole. There has recently been a lot of movement with regard to both security policy and energy policy. This is creating a new political and strategic situation in Europe that we are monitoring and assessing carefully. The fast pace of events and the general uncertainty mean that we cannot take further steps at present.

Consequently, we do not see any reason yet to adjust our ESG position in the areas of security policy and energy policy.

What is our approach regarding western companies with activities in Russia?

We will raise the issue of western companies’ activities in Russia during our ongoing dialogue with these companies. The first discussions on this matter have already taken place.

In view of the war now happening and the sanctions imposed on Russian individuals and companies as a result, business activities in Russia are exposed to considerable risk. The extent to which business activities not affected by sanctions might contribute to the Russian war of aggression must be investigated on a case-by-case basis. This investigation has already begun and will be intensified.


As at 28 February 2022.