Time of oxymorons
It takes a lot of conviction these days not to write about Russian Ukrainian war… And yes, it is a “war”, not a “special military operation” like Russian internal censorship demands to call it (under the thread of 15 years in prison). It also takes a lot of courage to regain a neutral tone when lives of civilians are sacrificed to geopolitical interests. But I will do my best…
However, it will be a compromise this time, as I would like to discuss the new EU taxonomy that is currently being prepared with main focus on social.
To better understand my post, I invite you to read a recent article in Bloomberg on the below link:
Weapons Group Points to Ukraine in Bid to Shape ESG Rulebook — Bloomberg
In a nutshell, the article rises a debate over weapons as social asset that should be included into taxonomy as an ESG compliant investment to allow for ESG oriented funds and financial institutions to easier invest and lend to defence companies. The lobby is using Russia’s invasion of Ukraine as an example of the thread to the social sustainability in Europe.
I would like to pause here and allow you fully comprehend this information…
I will even re-write it for you in one sentence: weapons as an asset with positive social impact that can be qualified as an ESG investment…
As much as I’m in favour of such countries as Germany to improve their sovereign defence sector via investing EUR100bln into army, I still struggle to imagine how any defence related activity can be legitimately qualified as an ESG compliant asset… With the same success we can include prisons into ESG scope, because they allow to keep criminals away, as well as cigarettes because they help to improve mental balance of certain people… Issue, package and sell all these shares and bonds back to large pension funds, just to close the circle and come back to the square one from where the social sustainability discussion started…
I apologise for an emotional and non-scientific post, but I believe that finance should adopt purpose as a driving force replacing the logic… Yes, it is logic to assume that weapon could be a social asset during the war time, but it defeats the very purpose of S within ESG…
The logic brought us to the time of oxymorons: social weapons, justifiable war, required casualties… All this makes sense, but goes against principals of humanity. Those principals that to me are the best social assets and social weapons…
Please stay human in whatever you do… Thank you!