SfC Members and the Defence Sector: Groundbreaking Projects and Frontline Engagements

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weapons report

Disarmament and arms limitation are essential to enhancing international peace and security, as well as for the economic and social advancement of all peoples. For this reason, weapons and the defence sector are one of the recurrent engagement issues for SfC members. During the summer meeting hosted in Milan, SfC members had the opportunity to present ongoing projects regarding the arm sector, and to discuss deeply on the worrying international situation. 

Fondazione Finanza Etica presented ZeroArmi, an innovative system for assessing the overall involvement of financial institutions in the production and sale of weapons, by analysing their financial operations, shareholdings, and the financing of transactions carried out by companies in the military sector. Developed in collaboration with the Italian Network for Peace and Disarmament, it is currently the most comprehensive analytical tool of its kind in Italy, built also through constructive dialogue with the analysed banks.

Etica Funds presented its investor initiative on autonomous weapons systems (AWS) in collaboration with the Stop Killer Robots coalition. Advances in technology now allow weapons systems to select and attack targets autonomously, meaning less human control over what is happening and why. The initiative will ask the United Nations to enact an internationally recognised law to introduce a standard definition – to clearly define the key elements of autonomous weapons systems, and to norm and regulate – to prohibit several systems and regulate the others. 

Finally, SfC’s latest report on critical shareholding in the defence sector was officially launched.  The defence industry has re-emerged as a focal point of global investment and political discourse. Governments have scaled up military spending and investors have revisited exclusion policies once considered definitive. Yet, despite this shift, the fundamental sustainability risks and negative impact of the arms sector remain unresolved — and in many cases, insufficiently examined. The report outlines how some SfC members have approached the challenge of engaging with the defence sector through critical shareholding, public positioning, and collaborative advocacy. 
Covering activities between 2018 and 2025, the report provides both an overview of the defence sector’s ESG profile and a practical illustration of investor-led strategies to influence corporate and policy behaviour. Among the targeted entities are companies such as Leonardo, Indra and Rheinmetall, as well as sovereign funds, ESG rating agencies, financial institutions and governments.