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Ministers are calling on the monetary companies trade to step up its assist for the UK’s defence firms and shrug off moral issues concerning the sector within the Metropolis of London.
Jonathan Reynolds, enterprise secretary, is internet hosting a gathering of defence and monetary executives on Thursday which is able to give attention to “navigating environmental, social and governance (ESG) rules and the way they will pose challenges to progress and attracting funding”.
Reynolds will inform the executives that banks mustn’t give in to “small however vocal marketing campaign teams” who demand boycotts of defence firms.
The Monetary Occasions disclosed last year that funding funds had minimize their holdings in Britain’s main defence firms by a mean of 9 per cent since early 2022, with some citing ESG issues.
Investor perceptions of the sector have change into extra constructive because the conflict in Ukraine, which has underlined the significance of a sturdy defence trade, however issues stay that some banks are reluctant to lend to firms. Small and medium-sized gamers, particularly, depend on banks to assist with money stream.
The enterprise division mentioned the roundtable with Reynolds was designed to alter buyers’ perceptions of the defence sector, which was “important to kick-starting financial progress”.
Attendees on the assembly embrace Kevin Craven, chief govt of commerce physique ADS, Bob Wigley, chair of UK Finance, and figures from Metropolis UK, BAE Techniques, Babcock, Barclays and Rothschilds.
Craven informed the FT that there wanted to be a “dialogue concerning the significance of defence in society” which might result in buyers and banks being extra taken with investing within the sector.
The assembly comes every week after John Healey, defence secretary, launched a brand new defence industrial technique.
Defence can also be one in all eight UK “progress sectors” recognized within the authorities’s broader industrial technique, together with areas comparable to inventive industries and life sciences.
Reynolds is predicted to inform lenders that it’s “time to shift in direction of a extra constructive perspective to defence”, in accordance with a briefing to the Occasions newspaper.
“Our world-leading defence sector is significant to the financial system, supporting 1000’s of high-skilled, high-paid jobs throughout the UK,” the minister mentioned.
