Defence Sector Banking Services: Environmental, Social and Governance Rules

Baroness Deech Excerpts

Monday 26th October 2026 Lords Chamber

[Lord Pitt-Watson (Lab)]

I think that is also covered in the FCA letter. One can overdo how significant ESG disclosures and regimes have been in preventing investment in defence. At one time, that was an issue, and there has been some concern among supporters of allowing ESG investment, along with some reform. My co-author, Stephen Davis, of Harvard Law School, is among those who has campaigned on this. I note that RUSI agrees that ESG disclosure regimes generally do not prevent investment in defence, and the push now being given by the FCA is the right next step for us to take to ensure that defence companies are treated in exactly the same way as any other companies seeking finance.

[Baroness Deech (CB)]

Will the Minister confirm that the sentiments he has expressed apply equally to any anti-Israel prejudice that is preventing proper investment in defence, and that the Government should lead the way by not putting any obstacles in the way of the supply of and co-operation with Israeli intelligence in our defence mechanisms?

[Lord Pitt-Watson (Lab)]

The FCA is saying—and I agree with it—that there are no rules that exclude financial services from a company solely because it operates in the defence sector. If an individual company wishes to take that into account, it should do so proportionately and consistently, and those rules should be clear to those who are approaching it. If any noble Lords would like me to send them a copy of what the FCA is asking to be done, drop me an email and I will make sure my office sends it to them. This is a significant step forward on what has been an important issue, and I again thank the Members of this House who have been raising it. This is the right response, and a solid one.