Bank withdrawals from defense companies supplying Western militaries have become so serious that people, including the NATO Secretary General, have been forced to tell the public that they support banks that invest in weapons companies.
NATO's secretary-general said defense companies should not be put in the same category as illegal drugs and pornography as immoral investments by banks, but this is part of a far-left campaign to “debank” military companies. This provided tacit evidence that this was implicitly felt.
Secretary-General Mark Rutte told an audience in Brussels this week that funding for the military should be seen as insurance against future increases in spending, although it also comes with costs in other areas where the government wants to spend, such as social security. He said that. . Spending billions of dollars on weapons to thwart an adversary's efforts means successfully thwarting trillions of dollars that don't need to be spent on winning future major wars, he said. said.
Rutte said that the fact that Ukraine currently spends 10 times more of its gross domestic product (GDP) on defense than European countries is “a stark reminder that freedom does not come for free.” However, he said it was up to politicians and the people to secure defense companies. It is possible that NATO forces can actually provide what is needed to provide that deterrence, or at least do so in the most cost-effective manner possible.
Rutte said part of the blame lies with governments, saying politicians should “stop putting up barriers between each other and between industries, banks and pension funds,” which “increase production costs.” “This will only stifle innovation and ultimately hinder our nation's security.”
But the more noteworthy message is from the people of NATO countries, who Mr. Rutte said “must tell banks and pension funds that refusing to invest in the defense industry is completely unacceptable.” It was against Defense is not in the same category as illegal drugs or pornography. ”
Campaign groups have been working tirelessly for years to put pressure on banks to refuse loans to defense companies, but in some cases, as abolitionist Nigel Farage has revealed, Bank employees sometimes bring their own political views and biases into the workplace when deciding who to deny loans to. , the same way.
This pressure has driven banks not to provide services to defense companies, and activists frequently cite nuclear weapons systems for equipment provided to certain countries, which left-wing campaign groups particularly dislike. Israel etc.. Campaigns to slow or prevent Western weapons companies from selling equipment to Israel have recently evolved from simple letter-writing campaigns to actual acts of vandalism and violence that have destroyed factories and injured people. .
Even reputable newspapers are playing this game in pressure campaigns against banks. London economic newspaper City AM This year's report shared wording from these groups, saying some British banks were “under intense scrutiny as being among Europe's top 10 major arms companies”. The newspaper quoted Martin Lohner, executive director of the Global Alliance for Banking on Values, as saying: “We are encouraging the financial industry to produce and trade arms and weapons.'' Let's call for an end to war and start allowing everyone to benefit from peace.”
So-called environmental, social and governance (ESG) standards, which codify the standards of left-wing movement groups into a rulebook for companies, are also undermining banks' defenses, despite what NATO and the West are facing. This is cited as a reason for this. Military planners argue that the world is less secure.
It is clear that these anti-defense campaigns are felt and considered a real threat by defense leaders. Just as NATO booed Rutte's comments, the British government made a similar point this week. times of london Noted:
Ministers will call on banks and investors to increase support for the UK defense sector, amid warnings that corporate virtue signaling is holding the industry back in the face of international threats. …Now is the time to shift to a more proactive stance on defense and move beyond that. a “narrow negative perception” of investing in the sector;
The report said the UK government's business secretary will tell finance executives not to bow to “small but vocal campaign groups”, adding that one-fifth of small defense companies (many said that the most agile and innovative companies are being denied banking services. The military industry has become a “barrier to growth.”
In surprisingly prescient comments for a left-wing British lawmaker, the business secretary told financial leaders that while they could benefit from doing business in a very safe country, He reportedly said that it would be hypocritical to turn your nose up at such a guarantee. He also pointed out that ESG is a cause of friction.
These latest comments are perhaps the loudest and clearest yet on the issue of banks bowing to boycott groups, but they are not the first. Before the UK general election flipped parliamentary control, the Conservative government also spoke out about how activists and ESG were undermining defense companies that supply the UK military and others.
The comments came amid revelations that just two British banks had refused or closed accounts to defense and aerospace companies at least 300 times in just one year. Tobias Ellwood, former Under Secretary of Defense, Chairman of the Defense Select Committee, Army Reserve Lt. Col. said about the news: “We must not allow well-intentioned ESG standards to jeopardize our ability to defend ourselves in a dangerous world. It's time to fix this.”
Dame Harriet Baldwin, then chair of the Treasury Committee, was asked about this figure and whether a bank operating in the UK would open an account with defense contractor BAE Systems, one of Britain's largest companies. “How on earth did you ever open an account?” he asked rhetorically about the fact that he didn't have one. Have you found yourself in a situation where a company working to protect national security cannot guarantee access to your bank account? ”
Dame Harriet said: “Organizations in this country cannot systematically debank legitimate businesses and industries because boards are tough on their jobs. They should have access to their accounts… Bank shareholders who demand environmental policy, social policy, governance policy may be inadvertently putting national security at risk. We cannot continue to do this.”
In 2023, then Defense Secretary Grant Shapps publicly stated that ESG policies were a threat to the UK's defense industry. He said: “This not only threatens a vital part of our economy, where MoD spending alone directly and indirectly supports more than 200,000 jobs, but it also threatens the UK's defense industry, which protects our way of life. “There is a lack of recognition that it is essential for
Mr Shapps also pointed to the fact that safe and stable Western countries are the foundation on which financial institutions have the freedom to generate profits for their shareholders. “It is a precondition for the freedom to act in any way.” take for granted. Key values within ESG must not undermine the capabilities developed to maintain peace and security. ”
It is clear that the current state of the Western defense industry is a matter of serious concern to NATO leaders, both at Alliance headquarters and in the nation's capital. The fact that countries have made the most of the post-Cold War “peace dividend” to maximize social spending and free up capital for their economies is very positive, but at the same time Western countries have become less flexible. , leaving adversaries unable to react quickly, critics say, pointing to Russia. In terms of missiles, it vastly outperforms NATO.
In November, NATO's top official, Admiral Rob Bauer, said companies needed to “prepare for wartime scenarios.” He said war and war prevention are “society-wide events,” explaining, “It may be the military that wins battles, but it is the economy that wins wars.”
