Travers Smith's Sustainability Insights: Defence needs capital – and clarity

As Europe scales up its capabilities, defence investment is an increasingly important theme for alternative asset managers. Policymakers want private capital and are keen to make investments commercially viable. Industry initiatives are helping asset managers to get comfortable with reputational and ethical issues. But challenges remain, and there is more to do.

To be clear: sustainability regulation is not – and never has been – the issue. The European Commission and the UK's FCA have been keen to stress that their sustainability rules do not impose meaningful constraints. Some clarifications – such as the Commission's updated list of “prohibited weapons" – were needed, but these were the easy wins.