More than 100 Labour MPs and peers called on banks and investment firms to ease their restrictions on investing in defence companies. They argue that current ethical investment rules have been impeding access to finance for the sector, which is crucial for bolstering the UK's national security, especially in light of increased defence spending following Russia's invasion of Ukraine. Although they acknowledge the positive impact of ESG regulations, they emphasize the need to reassess mechanisms that exclude defence investments, thereby enabling a more robust financial support structure for the sector.
In an open letter, more than 100 Labour MPs and peers urged banks and investment firms to relax their ethical investment rules that limit funding to defence companies.
The MPs argued that current ESG rules hinder defence access to finance and that changing this policy would bolster UK national security and aid economic growth.
The Labour Growth Group coordinated the letter, reflecting a trend where ethical investment attitudes are changing given the urgent need for rearmament after declines in defence spending.
They emphasized that while ESG regulations have driven positive economic change, it's necessary to rethink their blanket exclusions of all defence investments to enhance financial support.
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