Ethical Banks warn that investing in arms fuels war
By Stefano Leszcynski and Linda Bordoni
Half of the money allocated in the past year by governments to fund armed forces and weapons would be enough to provide basic health care for every person on the planet, as well as significantly reduce greenhouse gas emissions.
This was the finding of a report drawn up by the International Peace Bureau and was among the topics discussed at a three-day Global Alliance for Banking on Values Summit that wrapped up on Thursday, February 29, in Northern Italy.
The participants, from about 70 ethical banks from across the world, also focused on social and environmental justice and artificial intelligence.
But at a time when the wars in Ukraine and the Middle East have increased global spending on defence by 9 per cent, with escalating profits for weapon producers, it’s hardly surprising that analyses that compare policies and practices of mainstream banks with value-based ethical banks took centre-stage, as Banca Etica Ethical Finance expert Barbara Setti told Vatican Radio:
Noting that research carried out by the Ethical Finance Foundation of Banca Etica – a cooperative bank based on ethical finance principles - highlights that in 2023 global spending on defence rose by 9%. “It's a huge increase in investing on defence", Barbara Setti said.
And it is clear from the UN agenda for disarmament, she continued, “that there is a strong link between investment in arms and wars.”
Pointing out that the wars in Ukraine and the Middle East have led to a strong shift of investment towards the defence sector, she said it is important to know that global government spending on arms has reached 22 trillion US dollars.
“That means it accounts for 22 per cent of the world's GDP,” she said.
For an economy of peace
In the run-up to the Summit, over 71 ethical banks asked the financial system to change their approach and make sure their investments take into account the principles of Ethical Finance which are transparency, participation, sobriety, efficiency and attention to the non-economic consequences of economic actions.to investment.
Setti said she is hopeful that such a course change may be undertaken in the next few years, as positive signals in the past two years seem to show that investment is moving “towards a more sustainable sector.”
“Ethical Finance asked banks to divest from the arms and defence sectors because we all know that fueling this sector is fueling the war now and in the next years,” she said.
Setti explained that “Ethical Finance divests from arms; it is an economy of peace, not an economy of war.”
It is an economy, she continued, that is devoted to development, to the environment, to social economy. It aims “to foster the planet and to sustain the planet and people.”
Choosing to support an ethical economic system
Setti agrees that each one of us has a choice and a responsibility in the financial sector regarding where to invest and how to invest.
“The first thing to learn and invest in is how and where banks put their money. Not all banks are the same,” she explained.
Pointing out that it is easy to learn a lot about the financial institution you are considering just by going online and googling information about it, she said every one of us can do our part in supporting an ethical economic system.
“If you look at the ethical and value-based banks,” Setti concluded, “you can see that there are banks that foster another kind of economy and community!”
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