So, let’s allow the planet to make its assessment by looking at everything we have built in the past. Most of us recognize that we cannot change what we were and will not return to what we were before. This is true not only because of the age and maturity we have reached but also because of what we have learned and unlearned along the way.
Our group conscience guides us in defending our values and in versatilely integrating who we are and what we need. There are things that we do not agree with, and many others that we consider ineffective for the current times, so it will depend on which side of the planet you are on to see all this as an indelible mark or a possibility to motivate change.
So the question arises: How much does the world depend on war innovations to maintain its structures?
Let’s analyze this matter carefully, taking into account that the global economy has a significant dependence on spending and innovation in weapons, including firearms. This phenomenon not only impacts the growth of various industries but also influences the research and development of advanced technologies.
In addition, the production and trade of weapons generate thousands of jobs worldwide, which is often justified as a driver of economic growth. However, this relationship also raises important ethical and social questions, since resources allocated to defence and militarization could be invested in areas that promote human well-being, such as education and public health.
Here are some key points; let’s go to some information sources: Europe and the world have been increasing their military spending for years, and in 2021, they raised it to a record: global military spending has exceeded the 2 trillion dollar barrier for the first time.
The 2.11 trillion dollars that all countries have allocated to weapons in 2021 represents an increase of 0.7% in real terms, according to data from the Stockholm International Peace Research Institute.
The growth rate has been reduced by inflation, but in nominal terms, it represents an increase of 6.1%, explains SIPRI.
Milan, February 29, 2024 – The new report “Financing War. Financing Peace” highlights the critical role played by the global financial sector in financing military conflict, with at least $1 trillion invested in the arms sector between 2020 and 2022. The report was launched on February 28, 2024, at the annual summit of the Global Alliance for Banking on Values (GABV) in Milan, a network of inclusive and sustainable banks that remain opposed to financing, or investing in, arms production or trade. The GABV has also issued a strong “Declaration for Peace” condemning violence and urging the world’s leading financial institutions to divest from the arms sector.
The report, commissioned by the Fondazione Finanza Ética and the GABV and prepared by the Berlin-based consultancy Merian Research, shows that financial institutions have invested more than $959 billion worldwide between 2020 and 2022 to support arms production and trade (source: Centre Delàs). Of this amount, almost half a trillion dollars, which constitutes more than half of the total investment, has been provided by US entities, and another $79 billion comes from the 10 main European investors. The 15 largest European banks alone invest €87.72 billion in arms companies, according to figures from the NGO PAX.
Lack of transparency
“This report aims to analyse the financial sector’s involvement in the production and trade of weapons used in large-scale conflicts, by comparing the policies and practices of conventional banks with those of ethical, values-based banks,” says Mauro Meggiolaro, author of the Merian Research report.
The figures analysed in this report are therefore a conservative estimate of total global arms financing. The information has been obtained from reputable and well-known sources, but the report points out the difficulties in obtaining complete data due to the lack of transparency in this field. There is no official database that compiles all investments, loans and services by global financial institutions in the arms industry.
The business of war
The report also highlights the increase in the shares of arms manufacturers following the conflicts in Ukraine in 2022 and Palestine in 2023, illustrating the financial incentives behind these conflicts. A recent Financial Times analysis revealed record levels of new arms orders in 2022 and the first half of 2023, leading to substantial gains in aerospace and defence-related stock indices.
The International Institute for Strategic Studies’ Military Balance 2024 showed that global defence spending grew by 9% to a record $2.2 trillion, driven in part by increased budgets by NATO member states in response to Russian aggression against Ukraine.
Arms investments cannot be sustainable
The report “Financing War. (It does not imply a comment from me, the one who writes the essay) Financing Peace” highlights that while the exclusion of the arms sector is common among many investment funds that claim to be “sustainable”, some financial institutions are now reconsidering their investment policies in the wake of the Ukraine war. In November 2023, EU defence ministers adopted a joint declaration advocating for the inclusion of the arms industry in ESG (Environmental, Social, and Governance) investment frameworks.
In contrast, the banking-with-values view, represented by the GABV, stands firmly against financing arms production or trade. The 71 member banks of the GABV have no material exposure to the arms industry, and the majority of them (73%) have adopted explicit policies to exclude any type of weapons from their lending and investments.
Alongside the launch of the report, the GABV presented the “Milan Declaration: A Commitment for Peace”, which calls on financial institutions to divest from the arms industry and rejects the financing of arms and armaments as meeting any definition of sustainable finance.
According to Martin Rohner, Executive Director of the GABV:
“Peace is a precondition for financing positive social and environmental change. This is why financing the arms industry is contrary to any definition of sustainable finance. We, as a movement of banking with values, choose not to finance arms and call on the financial industry to stop investing in the production and trade of arms. Let us all start to benefit from peace, not from war.”
With this declaration, the GABV “commits to continue and intensify its efforts to promote peace, in all its forms, and calls on financial institutions around the world to follow its example and stop investing in the arms industry that spreads conflicts around the world.”
Fondazione Finanza Etica
The Fondazione Finanza Ética is the cultural foundation of the Banca Ética Group in Italy and Spain. It promotes research and conducts studies on ethical finance issues, provides critical analysis and proposes alternatives to the norms and practices of the financial world. It also actively promotes the study and awareness of critical financial education. finanzaetica.info
Global Alliance for Banking on Values (GABV)
GABV is a network of independent banks that use finance to achieve sustainable economic, social and environmental development. Their collective goal is to change the banking system to be more transparent, support economic, social and environmental sustainability and serve the real economy.
GABV has over 70 members and operates in 45 countries across Africa, Asia-Pacific, Latin America, North America and Europe. Together, they serve over 60 million customers, employ 80,000 people and manage assets worth over $210 billion. gabv.org
In 2024, the world is watching the Russian invasion of Ukraine, watching the Israeli war in Gaza and watching countries like Iran enter the conflict in the Middle East.
These and other wars have been the cause or excuse for States to raise global military spending to the highest level in history: it has increased by 6.8% in 2023, which is the steepest rise in the last 15 years, according to data published this Monday 22 by Sipri (Stockholm International Peace Research Institute) and reported by the newspaper El País.
https://www.merian-research.com/
https://www.businessinsider.es/ucrania-perdiendo-guerra-rusia-podria-ser-derrota-1380727
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