British banks must abandon outdated ethical standards and increase the lending to domestic defense manufacturers in a ‘patriotic’ attempt to ensure that the UK can meet its safety needs, defenders of defense told Sky News.
The defense industry has long complained that the standards of the environment, sustainability and management (ESG), meant to lead the impact of the business on society, have hindered small and medium -sized businesses (SMEs) that increase finance.
With the government promising to increase the spending of defense 2.5% of GDPAnd the chancellor who should like to increase the SMEs in the sector believes the industry that ESG rules can withhold British businesses.
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Lizzie Jones of Supacat, who manufactures military vehicles used by special powers and infantry, told Sky News: “For the past few years, we have absolutely felt the uninteresting of banks to invest in the defense industry, which has been very difficult to handle over the past few years.
“We hope that the tide is starting to change, and that some of the patriotic feelings we need the defense industry, especially at the moment, will help persuade the banks that investment in defense industries is good for British growth.”
The call to support the defensive industry comes as European military heads in London meet to operational aspects of a proposed peacekeeping force in Ukraine.
Donald Trump’s return to the White House, and she demands that the European NATO partners tighten the defense and lead any security guarantees for Ukraine, forced a re-examination of defense priorities.
Rachel Reeves tried to link increased spending on her growth agenda, and defense will form part of the industrial strategy that is due to later this year.
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Earlier this month, a group of Labor MPs, and members of the Defense Select Committee, called on banks to end the ESG guidelines of ‘anti-defense’ in light of the US retreat of European safety, and the need to increase the support for Ukraine.
Improved access to finance is one of several demands of large and small defense providers, as the industry is preparing for greater demand.
Security of contracts, a reduction in the Ministry of Defense and access to cheap energy, skilled workers and critical minerals are also needed if the UK must enjoy sovereign capacity – the ability to build and deploy its own equipment, weapons and systems.
The call for a re -examination of ethical standards was reflected by one of the largest defensive providers, Leonardo UK, the British arm of an Italian multinational multinational manufacturing that produces helicopters and electronic warfare technology.
CEO Clive Higgins told Sky News: “The ESG agenda had an impact on small businesses where no banking took place effectively, and individuals could not get a bank account because they were in the defense sector.
“We have seen a real, proactive response from the government over the past twelve months. I think we are starting to see a shift in tragic events in Ukraine, which helps people recognize the importance of defense at home, because it ensures that we can enjoy the freedoms you and I take for granted every day.”
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The British Sustainable Finance Association, which represents a number of major investors and pension funds, has rejected the argument that the defense industry was “underbelly”.
CEO James Alexander said: ‘The idea that the low valuations and struggle to defend finances is due to’ ESG ‘criteria nonsense.
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“The UK’s ‘ESG’ (or sustainable financing) regulations do not prohibit defense investments at any stage. Although some values-based (or ‘ethical’) investors can choose to invest in defense companies, they represent a slight part of the financial system.
“Many financial institutions, including mainstream, sustainable investors, do invest in defense. However, the most important of the prospects of the defensive companies are the government’s expenses, as highlighted by the increase in various defense shares, as the UK and European allies have understood the increases in defense spending.”
The Financial Conduct Authority said last month that its ESG reporting rules contain nothing “that does not prevent investment or finance for defense companies”, which implies that the denial or defense of defense is a choice for institutions and their clients.
