LONDON (Reuters) -Investing in defence companies is compatible with long-term sustainable considerations, a joint statement from Britain's finance ministry and UK asset management industry body said on Tuesday.
The government said last year that defence companies were being excluded from access to debt and equity capital, citing Environmental, Social and Governance (ESG) grounds.
The statement from the ministry and Investment Association on Tuesday said that investing in defence companies contributes to Britain's national security, defends civil liberties, while delivering long-term returns for pensions funds and retail investors.
"That is why the UK’s world leading investment management industry supports our defence sector, with the Investment Association’s members having invested 35 billion pounds in UK defence companies" the statement said.
"Investing in good, high-quality, well-run defence companies is compatible with ESG considerations as long-term sustainable investments is about helping all sectors and all companies in the economy succeed," it added.
Prime Minister Rishi Sunak said on Tuesday he would lift defence spending to 2.5% of GDP to reach 87 billion pounds ($108 billion) a year by 2030, saying Britain could not be complacent when the world was at its most dangerous since the Cold War.