Nuclear Risk: The Trillion-Dollar Blind Spot in Global Finance

Dr. Olamide Samuel leads network and engagement initiatives at Open Nuclear Network, a program of PAX Sapiens. He previously served as Special Envoy of the African Commission on Nuclear Energy and led work focused on the Treaty on the Non-Proliferation of Nuclear Weapons at the European Leadership Network. NTI is examining the economic and financial effects of nuclear war as part of its project on Understanding the Global Effects of Nuclear Weapons and will publish a paper on this topic later this year.

The financial sector has long understood the reality that geopolitical dynamics influence markets. Conflicts and sanctions create market volatility, influence investor sentiment, and impact capital flows. Yet the sector remains dangerously blind to the greatest geopolitical threat of all: nuclear war. To make matters worse, financial institutions continue to pour billions into nuclear weapons manufacturers. Gambling on deterrence without calculating the odds? Now that’s Risky Business.

Betting on Armageddon

In February 2025, BlackRock’s Geopolitical Risk Dashboard cited nuclear weapons risks in three of its top ten geopolitical risks by likelihood. Financial leaders like Warren Buffett have consistently warned that the risks of nuclear war are real, unpredictable, and vastly underestimated. In 2022, the CIA told President Biden that the probability of Russia using nuclear weapons could be as high as 50 percent under specific conditions. A 2024 survey by the Open Nuclear Network and the Forecasting Research Institute found that nuclear experts estimate the risk of nuclear war at 5 percent within the next two decades—far higher than Buffett’s already unsettling 0.01 percent.

Yet financial institutions continue to pour money into funding nuclear weapons manufacturers, with investors holding more than $513 billion in shares and bonds of these companies as of 2024. Clearly, nuclear weapons are big business—260 financial institutions continue to dabble in the nuclear weapons game.

The sector’s blind spot extends beyond investment. Credit rating agencies treat nuclear-armed states and nuclear-free nations equally, ignoring the fact that major financial hubs like London and New York are prime nuclear targets. Nuclear weapons are not evenly distributed around the world. For example, Nuclear-Weapon-Free Zones (NWFZs)—areas where nuclear weapons are completely banned—are more prevalent in the Global South, while nuclear-backed security alliances are mostly concentrated in the Global North. Most credit rating agencies like Moody’s and S&P do not consider whether a nation sits in a NWFZ or if it hosts high-priority nuclear targets. For example, New Zealand, nestled in the South Pacific Nuclear Free Zone, enjoys the same credit rating as the UK—a nuclear-armed state whose Trident submarines make it a prime target for Russian nukes.

Insurers exclude nuclear risks altogether, failing to account for the cascading financial effects of credible nuclear threats. In 2022, Berkshire Hathaway’s Vice Chairman of Insurance Operations Ajit Jain openly expressed his concerns about a “lack of ability to really estimate what our real exposure is in the event of a nuclear attack.” Instead, most insurance policies contain blanket nuclear exclusions, treating a Wellington winery the same as a Wall Street bank, even though the risks are worlds apart. Major financial hubs like London and New York appear in adversaries’ nuclear weapons targeting plans; a credible nuclear threat against these hubs, could jeopardise billions in real estate and equity markets. Modern just-in-time logistics means that even a strike with a ‘tactical’ nuclear weapon on Shenzhen’s ports could paralyze global tech manufacturing for the foreseeable future. And Jain believes that despite current nuclear exclusions, most regulators will still hold insurers accountable for secondary (knock-on) effects. In his words “they will rewrite the contracts and we will be required to pay.”

As geopolitical tensions continue to rise, the nuclear taboo is rapidly evaporating. Leaders in Finland, Germany, Japan, South Korea, Sweden, and Poland are openly expressing support for increased nuclear weapons stockpiles, while China is rapidly expanding its stockpile. We are inching closer to a nuclear detonation, and Buffett’s warning appears more pertinent: “There are going to be more accidents in connection with atomic weapons.” But who is paying attention?

The UN’s Wake-Up Call—And Who’s Hitting Snooze

The UN is finally taking notice. In November 2024, 144 nations (including China) voted to conduct the first comprehensive study on the economic and environmental consequences of nuclear war since the Cold War. This study will likely confirm what experts already fear: a nuclear conflict would collapse global supply chains, decimate food production, and wipe out trillions in economic value. Still, nuclear-armed states like the United Kingdom and France refuse to engage, dismissing the study as unnecessary—perhaps because acknowledging the financial impact would expose the absurdity of spending billions on weapons that could obliterate their own economies. If the study’s opponents are convinced that we “already know” these costs of nuclear war, they should remind pension fund managers whose portfolios assume that London will always be insurable.

Change is Possible

The financial sector already wields enormous power in shaping industries through ethical investment. The Don’t Bank on the Bomb campaign has pressured firms to divest from nuclear weapons, with the number of financial institutions invested in those companies dropping from 287 to 260 since the Treaty on the Prohibition of Nuclear Weapons (TPNW) entered into force. This exodus of capital sends a clear message: nuclear weapons are becoming toxic assets. Every year since the TPNW’s adoption, fewer institutions are willing to risk their reputations and portfolios on such controversial investments. Major players like Vanguard, Capital Group, and BlackRock remain top shareholders, but they face mounting pressure from ethically minded investors and activists. Morgan Stanley Capital International’s ESG methodology already penalizes companies that manufacture nuclear warheads, missiles, or components exclusively used in nuclear weapons.

The financial sector thrives on managing complex geopolitical risks. It makes little sense that the geopolitical risks of nuclear war are not factored in. With hundreds of billions invested in the nuclear deterrence gamble, the least our banks can do is calculate the odds.