“War is peace, peace is struggle.” In refrain with massive arms producers, the European Commission appears to have adopted the well-known dictum from George Orwell’s dystopian novel Nineteen eighty-four. Both are attempting to steer monetary markets that arms manufacturing will be thought-about sustainable.
The defence sector is searching for entry to the rising pool of capital held as “inexperienced” or “ESG” investments (that are supposed to advertise environmental, social, or good-governance actions). The European a part of this market is value €7 trillion, in line with the most recent Morningstar information.
Through cautious use of language, strategically crafted paperwork, and a sequence of conferences, the European Union has regularly expanded the idea of “sustainability”. The label now embraces sectors that may as soon as have appeared intrinsically alien to it, similar to defence and safety.
As is revealed on this investigation coordinated by Voxeurop, the European Commission’s evangelism has given a veneer of legitimacy to the surge in defence investments throughout the inexperienced portfolios of the large asset managers. Drone makers similar to France’s Safran, bomb producers similar to Germany’s Rheinmetall, and tank producers similar to Britain’s BAE Systems are all current within the portfolio of inexperienced funds value billions. Much of that cash comes from the main international asset-management corporations, that are authorised to function in European markets.
For occasion, the inventory of Elbit Systems, Israel’s main arms producer – and a direct participant within the Gaza struggle, together with the destruction of farmland there – is now included in funds labelled as serving “local weather transition” or “ESG”. Thus, smalltime European savers might have unwittingly financed what a United Nations fee has termed a genocide.
€50 billion in inexperienced funds ended up in tanks and navy drones
In the 4 years since 2021, “inexperienced” investments within the arms {industry} have greater than tripled, from €14.5 billion to €49.8 billion. The share of investments within the sector doubled in 2025 alone, in line with information we extracted from the London Stock Exchange Group, a world financial-data platform. We examined the figures on inexperienced investments in 118 of the world’s largest publicly traded defence firms (by market capitalisation), and we checked out 3,037 funds that included defence-sector shares of their inexperienced portfolios from 2021 to 2025.
Green investments are these ruled by the European Regulation on sustainability-related disclosure within the monetary companies sector (referred to as SFDR). In pressure since 2021, this units the principles for investments that promote “environmental and/or social traits” (Article 8) and people who should be correctly “sustainable” (Article 9). It applies to all monetary establishments working within the EU, the biggest market on the planet.
From 2021 to 2025, the market worth of all of the corporations surveyed doubled to €3 trillion, equal to France’s GDP in 2024. In 2025 alone, round 769 inexperienced funds amassed earnings of €7 billion from the sale of shares and the distribution of dividends by firms concerned in defence.
“In this era these firms generated sturdy earnings, and investing in defence was subsequently handy”, Nicola Koch, from the Sustainable Finance Observatory NGO, advised Voxeurop. Still, he says, “Weapon producers can not fall below the definition of sustainable investments as a result of their product’s final perform is to injure, destroy, or kill – thereby producing an hostile influence on human life and ecosystems – which isn’t aligned with the ideas of sustainable growth. It is subsequently of paramount significance that constructive and destructive screening standards are totally disclosed and retail investor preferences are rigorously elucidated and revered in financial-advice conferences.”
“’It may be very worthwhile to spend money on arms producers these days. It makes it much more profitable to spend money on these firms if they’re additionally recipients of inexperienced financing”, commented Attiya Waris, a UN Independent Expert on overseas debt, different worldwide monetary obligations, and human rights, in addition to a professor of fiscal legislation on the University of Nairobi.
Which firms benefitted probably the most ?
In 2025, 104 firms shared €49.8 billion in ostensibly inexperienced investments marketed by asset-management corporations. Half of this quantity went to 27 European firms. The greatest beneficiary, with €5.6 billion, is France’s Safran, adopted by the German firm Rheinmetall, with €4 billion.
Among the ten corporations attracting probably the most inexperienced capital are Germany’s MTU Aero Engines, Italy’s Leonardo, the Dutch subsidiary of Airbus, France’s Thales, Spain’s Indra, Sweden’s Saab, and Britain’s Rolls Royce and BAE Systems. According to current research, BAE Systems produces quite a lot of weapons utilized by the Israeli military in its navy operations in Gaza, together with the M109 Self-Propelled Howitzer, manufactured in collaboration with Rheinmetall. Rolls Royce, which controls the German subsidiary MTU, is a provider of engineering parts for Israeli tanks, together with these used in Gaza.
Outside Europe, US corporations dominate. Topping the rankings are the defence majors Howmet Aerospace, General Electric, Axon, Boeing, TransDigm, and RTX. Together they attracted €13 billion – 70% – of the €18 billion invested exterior the EU.
In Europe, the main sustainable funds embody the ESG Top World fund, provided by DWS in Germany (which has a €95 million stake in Canada’s Bombardier), and a number of other funds marketed by France’s Montpensier Arbevel. The latter embody a “Best Business Model SRI” (the place SRI stands for Sustainable and Responsible Investment) amongst others, which collectively maintain stakes value €60 million in Airbus and Safran. Meanwhile US large BlackRock is advertising and marketing (from Luxembourg) a “European Equity Transition” product. It holds €24 million in shares in MTU Aero Engines, Rolls Royce, and Thales.
“Weapon manufacturing is by definition not sustainable. These firms can already increase all of the capital they want by means of conventional debt devices, so securing ample funding shouldn’t be a problem for them”, notes Nicola Koch. “I don’t consider their presence in inexperienced funds is pushed by monetary issues. In my view, the try by the weapons {industry} to be categorized as sustainable is motivated moderately by repute, as a method to reveal that the {industry} is accountable.”
How did we get to such ranges of funding? The case of a German supervisor expelled from a European Commission assembly suggests what seems to be to be a well-coordinated, top-down course of involving the defence {industry} itself.
A banker’s uncomfortable inquiries to the EU Commission
Tommy Piemonte was a supervisor on the German financial institution Pax-Bank für Kirche und Caritas (“Peace Bank for Church and Charity”). A German-Italian, he has been within the discipline of sustainable finance for years. On 27 November 2024, he attended a landmark assembly organised by the European Commission: the EU Defence Industrial Investment Forum, subtitled “Investing in EU Defence and Security: A New Political Priority”. The assembly introduced collectively Commission officers, representatives of the arms {industry}, and monetary operators. It had a particular goal: to open the pockets of “sustainable” cash to the defence sector. We spoke to him in January 2025.
As a consultant of an moral financial institution and member of Shareholders for Change, Piemonte anticipated clear solutions from the Commission. Instead, for his pains in questioning the arms {industry}’s supposed “sustainability”, he was expelled from the assembly. Taking half remotely, Piemonte had tried solely easy questions, together with: “Why do you suppose it’s so essential for the arms {industry} to be labeled as sustainable?” His last contribution, in line with the reconstruction he supplied us, provoked his elimination from the assembly: “Don’t give the impression that you just’re not answering my questions simply because they appear somewhat important to you.”
“They kicked me out with out warning”, he advised us. ”I used to be shocked, it appeared like an unreal scenario. I characterize financiers and buyers, particularly those that care about sustainability, which is the sector this assembly was aimed toward.” He later acquired an evidence by e-mail from the occasion organisers: ”You have been eliminated since you have been disrupting the assembly.”
Piemonte’s account is confirmed by Andrea Baranes, president of the Ethical Finance Foundation, who was additionally current on the assembly. ”Almost all of the audio system repeated the identical catchphrase: there isn’t any sustainability with out safety“, he recollects, noting its Orwellian flavour. ”It was an specific try to point out that sustainable finance is appropriate with the defence sector. It’s as if I have been a vegetarian they usually served me a steak at a restaurant, saying that any longer all steaks are vegetarian.”
An EU Commission inside report that we noticed reveals what the organisers themselves believed. The assembly had, they are saying, generated “productive discussions on funding challenges and alternatives”, and “foster[ed] dialogue between the monetary sector, the Commission, and {industry} on defence-investment incentivisation.”
The slides from the occasion, which we obtained completely, affirm this narrative. Several directorates-general (DGs) of the Commission, from Defence and Space to Financial Stability, declare that the arms producers will be included within the inexperienced funds with out violating any regulation. Anne Fort, deputy head of cupboard to the EU Commissioner for Defence and Space, Andrius Kubilius, notes that “[t]he EU sustainable finance framework imposes no limitations on the financing of the defence sector”.
Joanna Sikora-Wittnebel, head of sustainable finance within the DG for Financial Stability, agrees: “the EU sustainable finance framework is appropriate with investing in defence.” Her slide harassed that “the SFDR is sector-neutral”, which means that it would not robotically exclude or embody total financial sectors (just like the protection {industry}).
Weapons that “don’t trigger important hurt”
To be thought-about sustainable, a European funding should not trigger important hurt to sustainability targets. The Commission has supplied a listing of indicators referred to as “Principal hostile impacts of funding selections on sustainability components”.
The solely point out of the navy sector in these indicators is publicity to controversial weapons (anti-personnel mines; cluster munitions; chemical and organic weapons). According to the laws, different navy {hardware} doesn’t trigger important hurt. These embody tanks, armed drones, ammunition, firearms. and even nuclear weapons.
“Our Article 8 funds might spend money on firms throughout the defence {industry}, relying on if the fund follows our Exclusion technique or our degree of prolonged exclusion technique”, a spokesperson for Swedbank Robur, which invested 1.25 billion euro within the defence sector within the first quarter of 2025, advised us. “We spend money on firms that we consider will give our prospects a sustainable long-term return. We carry out an in-depth evaluation of all investments within the defence {industry} earlier than investing”. Other asset managers we contacted, together with BlackRock, DWS and Franklin Templeton, refused to remark.
The case of the EU Defence Industrial Investment Forum is simply the tip of the iceberg of what seems to be a joint effort between the EU Commission and the defence {industry}. This is evidenced by inside reviews, conferences with lobbyists, and coverage suggestions from the navy sector.
How weapons turned sustainable in Europe
The marketing campaign to rebrand the defence {industry} as sustainable took off in 2021, the yr the SFDR got here into pressure. In October of that yr, the European Association of Aerospace, Security and Defence Industries (ASD) – which incorporates the main corporations on the centre of this investigation, together with Safran, Airbus, Rheinmetall, Leonardo, and BAE Systems – printed a place paper that set the tone for the inclusion of struggle manufacturing in inexperienced investments.
“Defence is a vital element of safety, and safety is a prerequisite for peace, prosperity, worldwide cooperation, and financial and social growth”, wrote ASD’s then-Secretary-General Jan Pie. “By serving to to make sure safety, European defence producers de facto make a significant contribution to a extra sustainable world.”
The paper decried the restrictions that banks’ inexperienced funds imposed on navy firms. It urged the EU establishments to unfold the message that defence has ESG credibility, whereas simplifying the exclusion standards utilized by the European Investment Bank.
This narrative has additionally been unfold by means of nationwide initiatives. In March 2021, a gaggle of defence-industry representatives from Germany, Finland, France, Belgium, the Netherlands, and Norway printed a assertion entitled “There is not any sustainability with no defence and safety {industry}”, which echoed the language of ASD. Deborah Allen, director of local weather, atmosphere, and infrastructure at BAE Systems, deployed the identical argument in an interview: “Without safety, there isn’t any sustainability.”
The {industry}’s rush to get into the inexperienced funding market can be clear from its inside paperwork. Minutes from conferences between defence lobbyists and the European Commission – which we obtained after an extended and complicated Freedom of Information request – clearly present the strain being utilized.
At one such gathering, in March 2021, the ASD complained that “an rising downside is inexperienced monetary merchandise that exclude defence an increasing number of and reduce entry to finance.”
In November of the identical yr, Alessandro Profumo, CEO of Leonardo – an Italian firm that manufactures, amongst different issues, long-range artillery ammunition and modern naval artillery programs – met with Timo Pesonen, Director-General for Defence and Space on the EU Commission. At that assembly, Profumo “expressed worries about the truth that the defence {industry} is excluded from the EU taxonomy for sustainable actions.”
This coordinated entrance has regularly discovered wider help in Brussels. Russia’s full-scale invasion of Ukraine gave it a lift.
On 15 February 2022, per week earlier than Moscow launched its “Special navy operation”, a communication from the Commission to the European Parliament urgently requested extra funds for the defence sector, saying that “It is equally essential to make sure that different horizontal insurance policies, similar to initiatives on sustainable finance, stay per the European Union efforts to facilitate the European defence {industry}’s ample entry to finance and funding.”
The Ukraine struggle has bolstered the {industry}’s arguments, together with within the monetary enviornment. “Since the Russian invasion of Ukraine, the previously depressed share costs of European defence firms have recovered significantly”, wrote ASD in October 2022. In its observe, it prompt that the Commission and the related European authorities problem pointers to make clear that asset managers mustn’t disclose the destructive impacts of investments in European defence firms uninvolved within the 4 classes of controversial weapons.
ASD’s textual content additionally appears to acknowledge the aversion of the general public and banks to navy investments: “Until and even when regulatory bias is eliminated, ASD is anxious that asset managers might proceed to implement defence {industry} exclusions, notably due to strain from public opinion or devoted investor necessities.” It then requires stronger political help from European establishments, urging them to “step up actions to persuade asset managers that the Union and its member states help defence firms and are decided to make sure their entry to personal funding.”
A yr later, the Commission restated its place virtually phrase for phrase in one other observe: “The Commission recognises the necessity to guarantee entry to financing and funding, together with from the personal sector, for all strategic sectors, particularly the defence {industry}, which contributes to the safety of European residents.”
“The rehabilitation of the defence sector within the collective creativeness, and subsequently within the regulatory framework, was the results of a skilful, refined and coordinated communication and lobbying technique by nationwide industrial leaders and commerce associations”, Alberto Alemanno, college professor and founding father of The Good Lobby, commented to Voxeurop.
This course of Alemanno describes culminated in 2024 with the European Defence Industry Strategy. In this doc, the Commission factors out that there aren’t any guidelines in opposition to funding within the navy sector, and repeats the slogan coined three years earlier: “The Union defence {industry} is a vital contributor to the resilience and the safety of the Union, and subsequently to peace and social sustainability. Against this backdrop, the EU sustainable finance framework is totally per the Union’s efforts to facilitate the European defence {industry}’s ample entry to finance and funding. It doesn’t impose any limitations on the financing of the defence sector.”
‘The distance between an moral funding and a strike on Gaza is extra direct, and extra traceable, than the {industry} would ever wish to admit’ – Iain Overton, Action on Armed Violence
Shortly after, on 27 November 2024, Tommy Piemonte was kicked out of the assembly and “steaks went vegetarian”.
“Not solely has the {industry} been rehabilitated, it has truly been promoted by means of its inclusion among the many classes eligible for sustainable financing”, provides Alemanno. “It’s an actual miracle produced by the identical technique.”
Finally, on 20 November, the Commission printed a revised model of the sustainable-finance laws which, for the primary time, immediately mentions the defence sector: “The SFDR evaluation builds on the steering from the Commission on the appliance of the EU sustainable finance framework relating to the defence sector.”
We requested the Commission why investments in defence could possibly be thought-about inexperienced, ESG or sustainable. A monetary companies spokesperson reiterated that “the EU sustainable finance framework locations no impediments on personal investments within the defence sector”, apart from controversial weapons.
“The true assertion is that there isn’t any sustainability with out peace”, UN skilled Attiya Warris commented. “Security doesn’t essentially should end result within the manufacture and use of arms, which may result in illegal killings. Financing and offering the means for illegal killings by means of the provision of arms and monetary help throughout your entire worth chain doesn’t correspond to safety.”
For Dr Iain Overton, Executive Director of the London-based battle analysis charity Action on Armed Violence, moderately than an summary moral downside, these investments reveal” just isn’t an summary moral downside however “an evidential chain of ethical accountability. The distance between an moral funding and a strike on Gaza is extra direct, and extra traceable, than the {industry} would ever wish to admit.”
Elbit Systems: from inexperienced funding to the Gaza War
Before 7 October 2023 – the day that Hamas brutally attacked Israel, leaving over 1,200 lifeless and triggering Israel’s Operation Iron Swords, which has killed greater than 69,000 in Gaza – the Elbit Systems share worth hovered round €200. Today, that quantity has greater than doubled, to €480.
Its 2024 monetary report clearly describes Elbit’s lively function in supplying weapons to the Israeli military: “Since the graduation of the struggle, Elbit Systems has skilled a fabric elevated demand for its merchandise and options from the Israel Ministry of Defense (IMOD) in comparison with the demand ranges previous to the struggle. The Company has additionally elevated its help to the IMOD, primarily by means of deliveries of its numerous programs and the devoted efforts of its workers. At the identical time, the Company and its subsidiaries world wide continued to conduct their enterprise in worldwide markets. During 2024, the Company was awarded contracts by the IMOD totaling over $5 billion.”
As Action on Armed Violence has already demonstrated, quite a few weapons produced by Elbit Systems, together with bombs and bullets, have been utilized in Gaza throughout Israel’s navy marketing campaign there.
The struggle has given Elbit the chance to experiment with the usage of synthetic intelligence and thus to enhance its merchandise. It can even have strengthened the arrogance of the 25 inexperienced funds that invested a complete of €23 million within the Israeli firm in 2025. These embody an “ESG Optimized” fund proposed by VP Bank in Liechtenstein and Germany, and the “BGF Climate Transition” fund, marketed in a number of EU international locations by BlackRock Investment Management UK.
Other inexperienced funds with stakes in Elbit declare to make use of ESG funding standards or to exclude firms that violate the ideas of the United Nations Global Compact, whose Principle 1 states: “Businesses ought to help and respect the safety of internationally proclaimed human rights.” For this very cause, notes UN skilled Attiya Warris, “merchandise used to destroy life particularly if linked to genocide can not probably align with the Global Compact and require critical evaluation.”
✍️ Additional reporting by Futura D’Aprile
🤝 This collaborative investigation was coordinated by Voxeurop, with contributions from El País (Spain), IrpiMedia (Italy) and Mediapart (France). Its manufacturing was supported by a grant from the Investigative Journalism for Europe (IJ4EU) fund. The International Press Institute (IPI), the European Journalism Centre (EJC) and another companions within the IJ4EU fund are usually not liable for the content material printed and any use made out of it.
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