• Defence companies excluded from debt and equity capital citing ESG.
• U.K. defence industry protects way of life.
• Defence spending helps prevent war and supports British way of life.
Defence Secretary Grant Shapps and the Treasury have issued a joint statement, expressing their opposition to the defunding of the defence industry based on Environmental, Social and Governance (ESG) considerations. They argue that defence companies are essential to protecting the British people, and that such divestment threatens to increase the cost of procurement and divert taxpayers’ money away from other defence spending and public services.
Furthermore, the joint statement emphasizes the integral role of the defence sector in supporting the national interests of the United Kingdom, and in providing military aid to Ukraine and other allies. In addition, it highlights the need to preserve the industrial facilities, skills, and intellectual property necessary for the U.K. to operate independently, and without external political influence.
While Shapps repudiates this element of ESG, he also stresses that the defence industry is otherwise a model of ESG values. The statement ends with a call for those seeking to inform investor choices to be clearer on their methodology and more prompt to correct errors.
The Defence Secretary Grant Shapps has hit back at the defunding of the defence industry in the name Environmental, Social and Governance (ESG) considerations, saying it threatens peace and security.
In a joint statement with the Treasury, Shapps said: “Defence companies are being excluded from access to debt and equity capital,” a policy which “fails to recognise that the U.K.’s defence industry is essential to protecting our way of life”.
Here’s how it begins.
I wish to make a joint statement with HM Treasury, on behalf of His Majesty’s Government.
The Government is clear the U.K.’s defence sector has an integral role in supporting the first duty of Government: to promote and protect the United Kingdom’s core national interests: the sovereignty, security and prosperity of the British people. That includes supporting allies and partners and contributing to broader international security.
Nowhere is this clearer than in Ukraine – where we continue to have a leading role in providing our Ukrainian friends with our support and with vital military aid to resist President Putin’s illegal and brutal war.
Our defence industrial base underpins our Armed Forces, maintains our continuous-at-sea nuclear deterrent and safeguards our critical infrastructure. The private sector is essential to our national security whether in peacetime or times of emergency. The ongoing maintenance of critical industrial facilities, skills and intellectual property onshore, and the approach we take to sustain these, gives us confidence that we can continue to operate independently, in defence of the country’s interests, without external political influence and protecting the sensitive technologies that underpin our military capability.
Despite this, defence companies are being excluded from access to debt and equity capital, citing Environmental, Social and Governance (ESG) grounds. This not only threatens an important part of the economy that, through MOD expenditure alone, directly and indirectly supports over 200,000 jobs, but it fails to recognise that the UK’s defence industry is essential to protecting our way of life. Such divestment also threatens to increase the cost of procurement, diverting taxpayers’ money away from other defence spending and from public services. The industry’s value to us as a key strategic asset is only increasing at a time of global uncertainty. …
Whilst investors must always be free to make their own choices, they should do so on the basis of the facts, and those seeking to inform those choices through providing ESG ratings should be clearer on their methodology and more prompt to correct errors when these are pointed out. Defence spending helps prevent war and helps support the British way of life, and those of our NATO allies and partners. …
This Government believes that the important values within ESG should not undermine capabilities developed to help us preserve peace and security, without which sustaining those values would not be possible.
While Shapps repudiates this element of ESG, he is at pains to stress that the defence industry is otherwise a model of ESG values, so the statement is hardly a fulsome rejection of all the ESG nonsense. But I suppose the move would fail completely if it wasn’t diplomatic.
But will the Leftist ideologues behind the ESG movement listen to anything a Tory Defence Secretary says? Or is it more likely to be just more Government words that fall on deaf ears and make the Government appear weak in the face of the woke onslaught?
Read the full statement here.