Defence stocks have no place in responsible portfolios

The situation in Ukraine has fostered some industry introspection regarding the ‘positive’ role of defence in responsible or sustainable portfolios. Some broker commentary has gone so far as to suggest this could be an existential moment for ESG in its need to re-evaluate some fundamental principles by allowing investment in defence.

While this is an understandable conclusion, it is one we reject categorically because it lacks firm adherence to ethical considerations that are foundational to the idea of responsibility. The landscape of what constitutes ‘responsible or sustainable' investment continues to evolve, but ultimately decisions must be based firmly on principles that ground any approach in integrity and authenticity; the so-called ‘red lines'. The reason, in our view for this new questioning of ESG is because the label itself is ill-equipped to deal with clearly absent moral decisions. Ethical investors apply t...