The Swedish banking group SEB is certainly not a financial giant in Europe, but the institution is a reference for the attention it pays, for its investments, to environmental, social and governance (ESG) criteria. Its sudden change of direction, since the outbreak of the war in Ukraine, on the financing of arms bears witness to a new outlook on the defense industry in Europe.
In 2021, the Swedish bank’s asset manager undertook to standardize its sustainable finance policy: all funds managed by SEB Investment Management renounced investing in companies deriving more than 5% of their income from arms industry.
“The growing geopolitical tensions of recent months, culminating in Russia’s invasion of Ukraine” on February 24, however “resulted in a change of position among some of the clients” of the asset management company. The Swedish group has therefore decided to authorize, from 1East April 2022, several of its funds to invest in the defense sector. These investments “are of paramount importance in supporting and defending democracy, freedom, stability and human rights”now believes SEB.
“Guilty of bank failure”
Germany, too, had lately been cautious. Armin Papperger, boss of Rheinmetall, an industrial conglomerate specializing in armaments, revealed in January that the banks BayernLB or LBBW, of which the group had been a client for several years, no longer wanted to work with him. “Many funds are investing significantly less money in our sector, if at all”he added in the German business magazine working week.
There too, the climate has changed since the German Chancellor, Olaf Scholz, announced, three days after the invasion of Ukraine by Russia, an immediate envelope of 100 billion euros for military expenditure and an increase in the budget. of defense so that it reaches more than 2% of gross domestic product. In the process, the German bank Commerzbank announced that it wanted to direct capital towards the arms industry.
What about in France? The leading European asset manager, Amundi, a subsidiary of the Crédit Agricole group, excludes investments in companies that manufacture weapons that violate international conventions (anti-personnel mines, cluster bombs, etc.) or are “controversial” (uranium weapons depleted, phosphorus, etc.). The French group, on the other hand, has no specific exclusion with regard to nuclear armament.
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