Airbus sounds alarm over City’s stance on defence

Airbus has warned that investors shunning defence stocks are undermining British industry and the country’s long-term security.

The world’s biggest plane maker, which employs 11,000 people in the UK, joins a chorus of companies and politicians that have urged the City to support the defence industry in the wake of the Ukraine war.

The Government is growing increasingly concerned about the refusal of large financial institutions to back defence stocks due to their environmental, social and governance (ESG) policies.

Andrew Griffith, the City Minister, and James Cartlidge, the defence procurement Minister, said in July that it was ‘perverse’ that some investors would shun or pull out of security companies at a time of war in Europe.

‘It wasn’t that long ago that the defence industry was being labelled as ‘uninvestable’ by certain sections of the City due to ESG criteria,’ said Ben Bridge, the UK chairman of Airbus’s defence business.

Bridge said that since Russia’s invasion of Ukraine, ‘some’ of this has changed – but he added that there was evidence it had not gone far enough.

‘Recent data from Morningstar showed that British defence companies continue to be sold off by UK investors, undermining both our industrial landscape and our sovereign capability,’ he said.

Around 130,000 people work in the UK’s defence industry and the supply chain encompasses around 3,000 home-grown companies.