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NATO Secretary General Mark Rutte has addressed growing concerns about banks refusing to invest in defense companies, highlighting a troubling trend of financial institutions categorizing arms manufacturers alongside illegal activities.
During a Brussels address, Rutte emphasized that while increased military spending might affect other governmental priorities, it serves as crucial insurance against potentially costlier future conflicts. He highlighted Ukraine’s defense spending, which currently represents ten times the GDP percentage compared to other European nations, as evidence of freedom’s price tag.
Nato boss Mark Rutte calls on European members of Nato to spend less on pensions, health and social security and more on defence “to preserve our way of life”. So the poor must pay for endless Nato wars? pic.twitter.com/gWi6ABthez
— John Moran (@RueDaungier) December 12, 2024
Rutte called for governments to eliminate barriers between industries, banks, and pension funds, arguing these obstacles increase production costs and impede security innovation. More notably, he directly appealed to NATO citizens, urging them to challenge their financial institutions’ refusal to invest in defense companies.
This financial squeeze on defense companies stems from sustained pressure by activist groups, who often target banks by highlighting controversial weapons systems or specific country sales. These campaigns have escalated beyond mere protests, with some instances resulting in factory vandalism and injuries.
The impact of these campaigns is reflected in mainstream financial media, with publications like City AM echoing activists’ viewpoints. The newspaper quoted Martin Rohner, executive director of the Global Alliance for Banking on Values, who said: “We call on the financial industry to stop fuelling the production of, and trade in, weapons and arms, and let’s start to all profit from peace, not war.”
Environmental, Social, and Governance (ESG) criteria have emerged as another obstacle for defense companies seeking financial support, despite increasing global security concerns.
The British government has joined this conversation, with The Times of London reporting ministerial calls for increased financial sector support of the defense industry. Government officials are particularly concerned about smaller defense companies struggling to access banking services, with approximately 20% reporting banking access as a growth barrier.
Previous instances highlight this ongoing issue. Reports revealed that two British banks alone had denied services to defense and aerospace companies hundreds of times in a single year. Former defense minister Tobias Ellwood warned against letting ESG standards compromise defense capabilities.
Good visit to the factory floor of @RheinmetallAG #Italy, where workers are producing air defence systems that are saving lives in #Ukraine every day. pic.twitter.com/4aCcgOVdrb
— Mark Rutte (@SecGenNATO) November 5, 2024
Dame Harriett Baldwin, then-Treasury Committee chairman, expressed disbelief that major defense contractors might struggle to secure basic banking services, emphasizing that legal businesses shouldn’t face systematic debanking based on board prejudices.
Former Defence Minister Grant Shapps previously identified ESG policies as a threat to Britain’s defense industry, noting that defense manufacturing supports over 200,000 jobs through Ministry of Defence expenditure alone.
NATO leadership continues expressing concern about Western defense industry capabilities. Admiral Rob Bauer, NATO’s senior military officer, recently stressed that businesses must prepare for potential wartime scenarios, noting that while militaries win battles, economies win wars.
