The initiative would have barred the Swiss central bank and pension funds from investing in companies that make more than five percent of revenues from sales of war material — while arms manufacturers would have been denied credit lines in Switzerland.

UPDATED: World's strictest corporate responsibility plan fails in Swiss vote

The initiative failed on both counts. Some 1,460,755 voters, or 57.5 percent, voted against the proposal, on a 46.4 percent turnout, according to the results published by ATS. Furthermore, a majority in only three and a half cantons voted in favour.

A man looks at a campaign banner reading in French “Responsible enterprise, NO to the initiative that misses its target” displayed in the streets of Geneva, on November 29, 2020.  Fabrice COFFRINI / AFP

Neutrality question

Famously neutral Switzerland, which has not been to war in centuries, already bans the production of nuclear, biological and chemical weapons, as well as landmines and cluster munitions.

But a coalition of peace groups and left-leaning parties sought a constitutional amendment making it illegal to finance any companies that make any form of war material, including assault rifles, tanks and their components.

According to a report earlier this month by research group Profundo, the central bank, large banks like UBS and Credit Suisse and other Swiss financial institutions have nearly $11 billion worth of loans and investments in arms companies, including BAE Systems, Lockheed Martin and Northrop.

Backers of the initiative claimed that the Swiss financial sector's investments in arms companies were “incompatible” with Swiss neutrality.

But the government said the definition would effectively block funding of civil aviation firms such as Boeing, Airbus and Rolls Royce, and harm pensions.