Help us improve in just 2 minutes—share your thoughts in our reader survey.
ESG investing approaches adjust to war in Gaza (2024)
| Environmental, social, and corporate governance |
|---|
|
| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
Russia’s invasion of Ukraine raised questions for the ESG investment industry related to what stocks ESG funds should own. ESG supporters arrived at a general agreement that funds should divest from Russian companies and allow investments in some munitions and weapons manufacturers.
Now, some ESG supporters are questioning the appropriateness of weapons investments in light of the war in Gaza:
| “ |
War is always profitable for companies that make weapons and weapons systems. When Russia invaded Ukraine and the United States sent billions of dollars’ worth of weapons to Kyiv, the American arms industry raked in profits. After the October 7 attack by Hamas on Israel, which killed over 1,100 people, the market value of the biggest US-based arms companies—Lockheed Martin, Raytheon, Boeing, Northrop Grumman, and General Dynamics—increased almost immediately by around $23 billion, and some individual stocks have risen since by as much as 27 percent. (Israel’s subsequent bombing of Gaza has killed over 28,000 people, including more than 12,000 children.) But it isn’t just your usual suspects that are profiting. A surprising number of climate- and sustainability-related exchange-traded funds (ETFs) and mutual funds have collectively invested billions in defense and weapons manufacturing companies, including the ones helping to fuel Israel’s war in Gaza. … [S]everal climate and ESG funds appear to think that weapons manufacturing doesn’t conflict with [their] values. For example, American Century Sustainable Equity Fund has over $20 million invested in Lockheed Martin. Lockheed, the world’s largest military contractor, provides the Israeli Air Force with F-16 and F-35 warplanes, an essential component of Israel’s ongoing bombardment of Gaza. (This week, a court in the Netherlands ordered the Dutch government to stop exporting parts for F-35 fighter jets to Israel, citing the risk of their being used in serious violations of international humanitarian law.)[1] |
” |
See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
| |||||||||||||||||||||||
