Ministers are holding talks with defence company heads and a representative for City shareholders. This comes amidst concerns that increasing demands for investment considered socially conscious are now undermining investor appetite to support the defence industry.
The defence procurement minister James Cartlidge and the economic secretary for the Treasury Andrew Griffith will host the meeting with the purpose of discussing the impact of a tidal wave of new environmental, social and governance (ESG) guidelines. Chief executive for the Investment Association (IA), Chris Cummings, will also be in attendance.
It has been suggested that indications exist that investors based in the UK are currently underinvested in the defence industry on a relative basis. However, UK ministers do not support disinvestment campaigns aimed at companies which defend rule-based order and peace.
The upcoming summit comes at what is a delicate time for the UK defence industry, sectors of which have received a surge in sales following the Russian invasion of Ukraine. While shares soared when war broke out, they are now beginning to descend.
A source from the Treasury commented that the meeting’s objective was to determine whether ESG factors were serving as a barrier to investors supporting the defence industry. The meeting also served the purpose of exploring how the UK government could potentially help to overcome such blocks.
Britons interested in ESG and defence assets alike often take investment advice in Shropshire, Chester and other parts of the country.
Analysis by the IA suggests that, at present, the total value of capital being invested in the defence and aerospace industry through its funds is a little over £20 billion.
