Airbus defends defence in Europe's ESG debate

Airbus' products include the A400M military transport plane. (Airbus)

With environmental, social, and governance (ESG) criteria gaining prominence in Europe as a tool to evaluate companies, Airbus is trying to counter the perception that the defence industry is incompatible with those standards.

Reducing carbon dioxide emissions is a major ESG goal for the European Union. While military equipment uses a significant amount of carbon-based fuels, defence contributes to the peace and prosperity that Europe needs to shift the continent to more climate-friendly energy sources, according to Airbus CEO Guillaume Faury.

“We believe defence should be considered as something positive in terms of ESG and the role it plays for societies, and for people,” Faury told reporters on 17 February. Europe “needs to support its own defence industry to have a strong defence and security system for Europe”.

Airbus is sharing its views with policymakers, and is making headway, but it must continue making its case, Faury said. “It requires a lot of explanation, a lot of discussions, and a lot of convincing,” he added.

According to the AeroSpace and Defence Industries Association of Europe (ASD), whose board vice-chairman is Faury, many banks are reluctant to support defence activities because of growing concerns about ESG. In an October 2021 position paper, ASD warned that investment regulations the European Commission is considering to promote ESG could classify defence as unsustainable, further stigmatising the sector and making it harder for the industry to obtain financing and attract workers.