Arms Investments: What are the Ethical and Sustainable Considerations?

Last Updated: 24. November 2023By

Both Putin’s attack war against Ukraine and the brutal attack of Palestinian terrorists on Israel are causing defense companies to appear in a different light to investors.

A survey by the comparison portal Verivox showed that before the start of the Ukraine war, around 53 percent of Germans found investments in defense companies morally reprehensible. After the Russian attack, around 60 percent of convinced arms opponents changed their minds. They said that they now found defense investments acceptable or would reconsider their opinion.

The fact that investments in defense companies are in demand is also reflected in the stock prices of important German defense companies. According to, for example, the value of Rheinmetall shares has almost tripled since the Russian attack on Ukraine last year, from around 90 euros to around 270 euros.

The company therefore rose to the DAX. The shares of Bavarian radar manufacturer Hensoldt are worth about twice as much as before the Ukraine war.

Share price increases in the double-digit range Most recently, defense shares rose sharply after the Hamas attack. On a weekly basis, the share prices rose in the double digits. At Rheinmetall it was plus 14 percent, at Hensoldt plus 11.6 percent.

„Defense is increasingly seen as something positive simply because it has been recognized that defending an area of sovereignty or deterring potential aggression is necessary,“ explains financial ethicist Klaus Gabriel on

The desire to invest in one’s own defense is certainly an important argument, but it is also about profit. In recent years, more attractive profits could be achieved with other investments. It was therefore easy to „for moral reasons“ to leave defense papers to the left. This has changed. The defense industry today has a great growth potential, which makes it interesting for investors.

What does the EU say about sustainability? While investments in defense companies are becoming more attractive to some investors, other investors remain skeptical. They wonder if investments in tank or gun makers are now really ethical or even sustainable.

With the so-called sustainability taxonomy, the European Union wants to create criteria to better assess the sustainability implemented in companies. This applies to both ecological and social criteria. The defense industry is not explicitly mentioned in the taxonomy, but it is said that tank builders and co. can still meet the sustainability criteria.

Initiatives for sustainable financing should be in line with the EU’s efforts to „facilitate access to finance and investments for the European defense industry,“ as EU Commissioner Mairead McGuiness is quoted on

There would be restrictions on controversial weapons. These include cluster bombs, biological weapons or poison gas.

Now learn attractive alternatives to defense papers Whether investments in defense companies are suitable for you or not, you ultimately have to decide for yourself. If you decide against it, you can also take great chances of winning with other papers. Recommendations can be found in Sicheres Geld, a consulting service for critical investors who want active asset protection.

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