European investors are navigating a structural shift in how defence is considered within responsible investment frameworks. Since 2022, geopolitical developments - most notably Russia’s invasion of Ukraine - have triggered reassessments of long-standing exclusion policies and accelerated demand for more structured investment approaches.
While defence is increasingly recognised as linked to national resilience and democratic stability, it remains one of the most complex sectors from an environmental, social, and governance perspective. Regulatory frameworks do not prohibit defence investment, but they do require investors to justify, assess, and disclose their decisions.
At the centre of this evolving landscape lies fiduciary duty: the responsibility to act in the long-term interests of beneficiaries while navigating growing geopolitical uncertainty.
European Investors and Defence
Webinar Insights - Fiduciary Duty, Ethics and the European Investor ContextGlobal Advisory Alliance, March 2026
This paper summarises key perspectives shared during the Global Advisory Alliance webinar held in March 2026.The discussion explored how European investors are approaching defence within ESG frameworks. It focused on three areas: fiduciary duty, ethical boundaries and practical investment decision-making. The insights reflect a shift from exclusion-based policies to structured evaluation of risk, governance, and responsibility." — Anna-Stina Wiklund | Advisor to European institutional investors
Executive Summary
Part I - A Changing Security Landscape for European Investors
Across Europe, defence investment has moved from the margins of responsible investment discussions to the centre of fiduciary debate.As moderator Dominic Webb observed:“Since the Russian invasion of Ukraine, defense investment has undergone something of a renaissance.” — Dominic Webb, Responsible Investor
This shift has not occurred uniformly across Europe. In Northern Europe, responsible investment policies have evolved rapidly, particularly among pension funds and faith-based investors. “Previously, many investors relied on broad exclusions. Since 2022, we have seen more nuanced discussions emerging about what responsible defence investment actually means.”
— Anna-Stina Wiklund, Global Advisory Alliance
At the same time, many institutions, particularly those with strong value-based mandates have reaffirmed their ethical boundaries.“Those aren't constraints on our fiduciary duty. They are our fiduciary duty, and we should not generate returns from activities that contradict our mission.” — Linda Sundberg, Church of Sweden
This reflects a defining characteristic of the current landscape: different institutions are reaching different conclusions, but through increasingly structured reasoning.
This shift has not occurred uniformly across Europe. In Northern Europe, responsible investment policies have evolved rapidly, particularly among pension funds and faith-based investors. “Previously, many investors relied on broad exclusions. Since 2022, we have seen more nuanced discussions emerging about what responsible defence investment actually means.”
— Anna-Stina Wiklund, Global Advisory Alliance
At the same time, many institutions, particularly those with strong value-based mandates have reaffirmed their ethical boundaries.“Those aren't constraints on our fiduciary duty. They are our fiduciary duty, and we should not generate returns from activities that contradict our mission.” — Linda Sundberg, Church of Sweden
This reflects a defining characteristic of the current landscape: different institutions are reaching different conclusions, but through increasingly structured reasoning.
Part II - Moving Beyond Exclusions: Governance, Risk and Responsibility
Part III - From Principles to Practice: The Role of Practical Frameworks and the GRID Initiative
Concluding Reflections: Fiduciary Duty in an Era
of Geopolitical Uncertainty
Supporting investors navigating defence decisions
If you are exploring these topics within your organisation and would like to continue the conversation, Anna-Stina Wiklund, Defence and Stewardship Programme Lead, is available to connect and discuss how GAA advisors can support your thinking.
On this page:
- European investors have moved defence from the margins to the centre of responsible investment debate, driven by geopolitical shifts since Russia's invasion of Ukraine in 2022.
- Fiduciary duty now encompasses geopolitical risk management - institutions are reassessing broad exclusion policies in favour of structured, evidence-based evaluation.
- Responsible defence investment is increasingly a governance challenge, with human rights due diligence, supply chain traceability, and export controls at its core.
- The GRID initiative provides practical tools to help investors ask the right questions - moving the field from principles toward consistent, repeatable decision-making frameworks.
- Whatever conclusion institutions reach, responsible investment in defence must be structured, transparent, and defensible - not identical across investors, but consistently reasoned.
GAA Stewardship Advisory
GAA advises pension funds, asset managers, family offices, and institutional investors on responsible investment frameworks, stewardship programmes, and ESG integration.
Our advisors come from inside the institutional investment process - not from audit or compliance backgrounds. We understand what fiduciary duty requires, what beneficiaries expect, and what stewardship practice looks like when it is genuinely operational.
