Defence companies under increased ESG scrutiny as geopolitical tensions rise

Product governance and safety

Sorin Dojan
clock • 2 min read

Defence businesses are "under increasing scrutiny for ESG risks amid rising global military spending driven by geopolitical tensions", according to Morningstar’s latest Defence Landscape report.

The report, which covers Morningstar's defence portfolio comprising 14 prime defence contractors in Europe and the US, found "the industry faces critical challenges, such as a significant environmental footprint, ethical supply chain concerns, and strict product safety and regulatory requirements," Loredana Muharremi, equity analyst at Morningstar, said. "Shifting investor sentiment and evolving regulations are redefining how the sector is assessed through an ESG lens." Ukraine war has made City spending on defence 'essential' as opposed to 'contentious' Historically, defence stock...

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