German banks exclude arms makers on ethical grounds
A group of German banks has opposed the inclusion of arms manufacturers in investment portfolios specifically marketed as ethically sustainable. They cited their commitment to peace as the reason.
Following the escalation of the Ukraine conflict in February 2022, Germany and other EU nations have considerably ramped up defense spending, with weapons makers such as Rheinmetall raking in record profits from the growing orders.
In a public document outlining their stance released earlier this month, GLS-Bank, KD-Bank, BiB Essen, Bank fuer Kirche und Caritas, DKM – Partner fuer Kirche und Caritas, Evangelische Bank, Steyler Ethik Bank, and PAX Bank stated that while they agree that “investments in armaments are necessary, [they] are not ethically sustainable.”
Despite the recent “geopolitical developments and growing threats,” they said, “people who consciously choose to invest in ethically sustainable investments should be able to be sure that their values are not being violated.”
“That is why we are positioning ourselves against the unrestricted inclusion of arms companies from all over the world in sustainable financial products,” the financial institutions, which describe themselves as either ‘Christian’ or ‘ethical’, argued.
They explained that they felt compelled to outline their position after the German banking industry relaxed constraints on the inclusion of arms manufacturers in sustainable investments, allowing entities whose core business is defense and weapons production.
In their statement, the eight banks said they have routinely excluded from their portfolios companies that generate an average of more than 3% to 5% of their revenue from the development, production, and sale of weapons and military equipment.
“We will continue to adhere to this policy in the future because we do not want to dilute sustainability in our financial products,” they stated.
The banks argued that the “use of weapons and armaments does not make a positive contribution to achieving the Sustainable Development Goals, but rather destroys lives, civil society, the environment, and infrastructure,” and stressed that investments in these companies “enable armed conflicts around the world.”
According to the document, arms manufacturers can readily access non-sustainable, conventional financial products, so they are not at any serious disadvantage.
