BAE Systems and Babcock set to meet with ministers over ESG investment concerns
Ministers are set to hold talks on Wednesday with the bosses of a number of major defence companies, over concerns that socially conscious investing is hurting the sector.
Andrew Griffith, the economic secretary to the Treasury and James Cartlidge, defence procurement minister, will meet bosses from BAE systems, Babcock International and QinitiQ tomorrow, Sky News reported.
Chris Cummings, the head of the Investment Association, will also be at the meeting, the report said.
A source from the Treasury told Sky News that the goal of the meeting was to ascertain whether Environmental, Social and Governance (ESG) factors were acting as a barrier to the sector and how the government can help.
ESG guidelines have caused headaches for the defence and aerospace sector, which has previously warned that the ESG investment standards could restrict its ability to access capital.
It comes as the firms have experienced a boost from a rise in state defence spending following Russia’s invasion of Ukraine.
In April, UK-based QinetiQ lifted its profit guidance for the year ahead after an increase in orders, and is currently anticipating revenues of £175m for the year ahead.
BAE Systems enjoyed a record year for new orders in its 2022 results in February, with underlying sales coming in at £2.5bn.
A BAE Systems spokesperson said: “We welcome the opportunity to be part of discussions with industry peers and representatives from government on ESG investing in defence.”
“The conflict in Ukraine has driven greater recognition of the value of the defence industry, but it’s important that we continue to enhance understanding of the role our sector plays in contributing to both national security and economic prosperity,” they added.
The Treasury did not respond to a request for comment.