Gregor Poynton MP: ESG rules must not block defence investment for Ukraine and UK growth

While ESG is an important tool for responsible investment, its current mechanisms too often wrongly classify too much of our defence investment as ‘unethical’ - a stance that risks undermining efforts to support Ukraine in its hour of need. The letter has been supported by the highly influential Labour Growth Group of MPs, of which Gregor Poynton is a member.

This follows Chancellor Rachel Reeves’ decision to amend the Sovereign Wealth Fund’s parameters to enable investment in UK defence industries, alongside a £2.26bn loan to Ukraine during President Zelenskyy’s visit.

Gregor Poynton is urging banks and fund managers to go further, ensuring that ESG frameworks do not obstruct essential defence investment.

Gregor Poynton MP argues defence investment will benefit small businesses and jobs across Scotland.

Gregor Poynton MP for Livingston constituency said: "We are in unprecedented times. We must continue to support Ukraine in its hour of need while ensuring the defence of our own nation. That means rethinking ESG mechanisms that wrongly exclude defence investment as ‘unethical’.

“ESG is both good and necessary, and as such it must not become a barrier to investment in Ukraine’s defence. We want to maintain a progressive stance, and that means recognising defence as an ethical, progressive option, one that protects freedom, democracy, and security.

“The defence industry is vital to protecting democracy and security, and it is wrong to label it as ‘unethical’ under blanket ESG policies. By removing this barrier, we can provide Ukraine with the support it desperately needs while also unlocking the potential for defence investment to drive economic growth in Livingston and in constituencies across the UK.”

Reforming ESG criteria would allow businesses in these areas to expand, create jobs, and contribute to both national security and economic growth.

Gregor Poynton MP in the House of Commons

Gregor Poynton MP is calling on financial institutions to act swiftly to ensure ESG framework support, rather than hinder investment in defence.

The full text of the letter:

Dear Britain’s Banks and Fund Managers,

Ukraine needs to be in the strongest possible position to defend itself against an aggressive military superpower. We are a group of Labour parliamentarians who understand that and want to help them do it. We need your help too.

Last week our Chancellor, Rachel Reeves, amended the parameters of the Sovereign Wealth Fund to enable investment in UK Defence industries to support our allies in Ukraine. Promising “action not just words” the Chancellor also agreed a loan of £2.26bn to Ukraine, during President Zelenskyy's visit to the UK.

Our financial institutions can do more to enable our UK Defence sector to provide the vital military supplies President Zelenskyy needs. You can also help Britain to rapidly generate the capabilities needed to defend itself. For too long companies with the ability to develop military technology at speed have faced unnecessary barriers to doing business in the UK. With defence manufacturers in constituencies nationwide, there is clear potential to drive economic growth.

For the United Kingdom to both support Ukraine in its hour of need and ensure defence of our own nation, we must rethink ESG mechanisms that often wrongly exclude all defence investment as ‘unethical’. There can be no more ethical investment than giving the Ukrainian people every ounce of support that can be mustered by their allies. The battlefields in which they fight are rapidly evolving, and the technology with it. This means turning on the financial taps to the firms that stand ready to deliver the best of British innovation, capability and skills.

Embedding environmental, social and governance concerns in finance and business leadership has driven positive change across the economy and society. ESG investment is rightly here to stay and we believe it is synonymous with the Ukrainian cause. We urge financial institutions immediately to sweep away ill-considered anti-defence rules which are acting as a barrier to doing what is right.

There is no silver bullet when it comes to Ukraine but our allies need to know that we are fully committed to providing the supplies that they so desperately need.

Please work with us on this request and act at speed to help Britain develop this strategic strength, at home and abroad.