Question to the HM Treasury:

To ask His Majesty's Government what progress they have made in reforming environmental, social, and governance rules to ensure that they are not used by financial institutions to deny banking services, including loans, to the UK defence sector.

The government recognises the vital contribution that the UK defence sector makes to national security and has been clear that investing in defence can be consistent with ethical investing and environmental, social and governance principles.

Last year the government laid secondary legislation to bring the provision of Environmental, Social and Governance ratings into scope of the FCA’s rule making powers. This will allow provide greater transparency around ESG ratings methodologies, support greater investor awareness – including for opportunities relating to defence companies.

The upcoming Defence Finance and Investment Strategy will look at how barriers to investment in defence can be removed while making the sector more attractive for private investment, including venture capital, private equity and pension funds.