Defence stocks
There ’ s no place for defence stocks in any type of fund that hopes to be badged as ESG-friendly . However , Putin ’ s campaign has put the cat among the ESG pigeons
Open arms It is certainly a thorny problem . The Ukrainian army has undoubtedly benefited from NLAW anti-tank missile systems provided by the UK government . But their manufacturer , Thales , along with other UK defence firms such as BAE Systems , is a major supplier to Saudi Arabia , a state that is under reform but has a poor human rights record . “ Not all defence companies will sell directly to regimes with poor human rights records , so in theory you might think there is some way of distinguishing between firms based on who they supply to ,” says Hollands . But the defence industry is highly connected , he notes , with multiple firms providing specialised technology or components for advanced systems . Defence firms are also likely to fail the ESG sniff test , as weapons systems typically have a high carbon footprint , especially in respect of aircraft and heavy armour such as tanks .
Issue 83 - April 2022 / 27 /