An initiative to help investors grapple with evolving expectations around the defence sector has taken a leap forward this month.
In November, IPE reported that experts from Schroders, LBP Asset Management, Amundi and Skandia were among those to form a group hoping to create a set of global principles on the topic.
The project has been spearheaded by Daniel Neale, head of social issues at the Church Commissioners for England, and a former conflict-stabilisation specialist with the British military.
Neale said this week that the plans have been updated on the back of feedback from the investor community since the November announcement.
As a result of that feedback, the initiative will be renamed the Guidance for Responsible Investment in Defence-related companies, or GRID.
The focus will be on “downstream and relevant operational elements of defence-related companies and their products and services” such as their design, development, sale, export, use, misuse and influence.
The guidance will be designed to support the responsible investment community, but will also seek to address defence financing and policies in the wider market, including among banks.
The initiative will now start workshopping ideas and drafting the guidance, with a view to publishing it this year.
The process will be overseen by a new steering group, which Neale told IPE was still being signed off internally by certain members, and would be announced shortly.
IPE understands it will include representatives from Europe, Asia, North America and Australia.
Once a draft version has been agreed, GRID will consult with investors, governments, companies and civil society before publishing the final guidance.
The project was launched amid widespread calls for Europe’s asset owners and managers to rethink long-standing bans on weapons investing, as the region moves to strengthen its defence capabilities in light of geopolitical instability.
This week, Swedish insurer Länsförsäkringar confirmed to the media it had relaxed its controversial weapons exclusions to allow more investment into nuclear weapons.
The decision was driven in part by Sweden’s recent entry into NATO, it noted.
Last month, JP Morgan Asset Management became the latest investor to drop defence exclusions in response to “client expectations relating to defence preparedness”, ditching the screens from more than 100 funds.
