“Weapons, War, and ESG: Where to Draw the Line?” is the latest Ethibel Viewpoint, co-published by Forum Ethibel and LuxFLAG addresses the growing tension between ethical principles in sustainable finance and investments in the arms and defence sector, amid a rapidly shifting geopolitical landscape.
As global military spending hit a record USD 2.718 billion in 2024, the debate over whether defence companies belong in sustainable portfolios is intensifying. The report offers a comprehensive classification of weapons (conventional vs. controversial), examines European regulatory frameworks, and outlines diverging investor practices and public policy positions.
Three distinct investment approaches identified in the conventional weapons:
- Full exclusion of conventional weapons, based on incompatibility with the UN Sustainable Development Goals.
- Conditional inclusion, recognising the strategic relevance of dual-use technologies and security as a precondition for sustainable development.
- Responsible inclusion, grounded in enhanced due diligence, transparency on arms exports, and rigorous ESG engagement.
No one-size-fits-all solution
The report does not advocate for a single position but provides an overview of existing approaches and calls for a nuanced, well-informed debate.
Authors’ statement
“With this Viewpoint, we aim to offer a structured foundation for a complex discussion and help investors make more informed decisions in today’s volatile global context.”
— Isabelle Delas, CEO of LuxFLAG & Kenny Frederickx, Director of Forum Ethibel
***
Media enquiries:
LuxFLAG – communications@luxflag.org
Forum Ethibel – info@ethibel.org