A Boeing B-52H Stratofortress strategic bomber, built to carry nuclear weapons for Cold War deterrence missions.
Photographer: SeongJoon Cho/BloombergHow Weapons of Mass Destruction Became Popular With ESG Investors
With war raging in its backyard, Europe’s leaders don’t want any ESG qualms to get in the way of steering private capital into a military deterrent strong enough to resist Russia.
The deadliest weapons ever manufactured are becoming a regular feature of Europe’s nearly $9 trillion ESG fund industry, as a label long associated with ethical investing gets stretched to accommodate the geopolitical moment.
Since Russia’s full-scale invasion of Ukraine in February 2022, the number of ESG equity funds exposed to the nuclear arms industry has soared more than 50% to over 2,000. Though the holdings represent just a fraction of the wider defense sector, the shift means that roughly half the ESG-registered equity funds in Europe are now allocating at least some capital to companies that manufacture, supply or transport nuclear arms, according to data compiled by Bloomberg.