Britain’s security at risk from banks calling virtue, ministers warn

The city has put Britain’s long-term security at risk. avoiding defense companies over misplaced ethical concerns, ministers have warned.

Andrew Griffith, the city minister, and James Cartlidge, the defense minister, argued that it was “perverse” for investors to deliberately discriminate against defense and security companies, or take a “blanket” approach to ethical investment, the time. when British help has been crucial in the Ukraine.

Writing in the Mail on Sunday, the ministers said: “Peace needs defence, and defense needs an industrial base.”

They added: “There is a worrying misunderstanding within investor preferences and the defense sector, which includes firms such as BAE Systems, Babcock and QinetiQ, which risks depriving the industry of capital at competitive valuations.”

BAE Systems, for example, makes tanks and munitions that have been vital in the war against Russia.

However, a recent survey revealed that almost two-thirds of institutional investors had already sold their holdings in defense and security companies. on environmental, social and governance (ESG) concernsor were considering divesting from those companies.

The ministers wrote: “It is blindly self-evident that all businesses rely on the peace and stability provided by the Armed Forces and the industrial base that supports them… There could hardly be a greater or more positive social responsibility than investing in peace. .

“If Russian tanks go any further into Europe, the freedom we all take for granted would be gone. The sooner investors realize this and get on board, the better.”

The comments come amid growing concern about how ESG policies in banks and investment companies they are enforced.

The Telegraph earlier this month revealed that NatWest-owned Coutts closed Nigel Farage’s bank accounts after deciding his views “do not align with our values.”

TO Coutts’ 40-page dossierFirst published by the Telegraph, it detailed why its ESG policies meant it should no longer provide services to Mr. Farage, saying the view was not political but “focused on inclusion and purpose.”

The line led to the resignation of Peter Flavel, Coutts’ boss, and Dame Alison Rose, CEO of NatWest. Dame Alison resigned after it emerged that she had leaked inaccurate information about the closure of the account to the BBC.

Former Cabinet minister David Davis criticized the corporate fad of “virtue-signaling and bombast”, saying so-called awakened capitalism “was going to be a passing phase of madness”.

Griffith last week announced a crackdown on lenders who block accounts based on customers’ personal opinions. The Telegraph revealed this weekend that he too was considering extending this to include businesses.