The nearby Russian-Ukraine war has also sent European governments scrambling to build up their own military strength. After years of resisting US pressure, last month Germany said it would allocate €100 billion ($110 billion) to a special fund in 2022 to top up its defence budget and raise it above the 2% of GDP required by NATO. Defence stocks surged following the news.
The arms lobby is pushing for investors and EU regulators to classify the industry as "sustainable." The arms lobby and some financial institutions are seizing the moment to push their argument that defence companies should be included in environmental, social and corporate governance (ESG) criteria.
Swedish bank SEB has already adjusted a brand new sustainability policy to now allow its funds to invest in the defence sector.
"It's absurd to say weapons are sustainable," said Christian Klein, professor of sustainable finance at the University of Kassel in Germany.
Andrew Murphy, director of Murphy&Spitz, a sustainable asset management firm in Germany explained measures like expanding the use of renewable energies and improving public transportation. "This is what needs to be promoted. Not the arms industry, not weapons that kill innocent people, destroy habitats and — in the wrong hands — enable wars of aggression by power-hungry rulers." He added. "The failure to focus on the most economically and ecologically viable forms of energy, namely energy from wind and solar, is what enabled Putin to wage wars of aggression in the first place."
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