Defense of Europe as a Responsible Investment
The last time the Western investment world saw a robust debate over the parameters of buying shares in the arms industry was roughly in the era of the Vietnam War. In the wake of that fraught conflict, thought-leading socially-responsible investor bodies such as the US Interfaith Center on Corporate Responsibility (ICCR) and counterparts in Europe installed clear guidelines against investing in “controversial” weapons. For many institutions, prompted in part by sentiment among clients, this strategy steadily metastasized into a more general allergy against taking stakes in publicly-traded companies implicated in arms manufacturing. As the Cold War ended and the so-called peace dividend took hold, there was little or no brake on the spread of investor resistance to the weapons trade, especially in Europe. Indeed, the public’s stake in protection against war is conspicuously absent from guidance on Environmental, Social, and Governance (ESG) parameters that have emerged in the capital market over the past two decades. Case in point: None of the 17 UN Sustainable Development Goals, agreed in January 2016, addresses the right to secure borders or deterrence to war.
