The long-standing exclusion of the defence sector by many sustainable investors is being re-evaluated in light of escalating global security risks. Robeco outlines how the Russian invasion of Ukraine and heightened geopolitical instability have prompted a reassessment of the role of investment in defence companies and sustainable investment principles.
While traditional ESG frameworks often treat defence as incompatible with sustainability goals, the firm highlights a growing recognition that responsible defence can contribute to peace and security.
“We are trying to square a natural reluctance to invest in defence, due to its inherent association with unsustainable and undesirable conflicts, with the fact that we are multi-asset investors, and we want to balance the trade-off between risk, return and sustainability when it comes to defence spending,” says Aliki Rouffiac, Portfolio Manager with Robeco Sustainable Multi-Asset Solutions.
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