Global Advisory Alliance is launching the Defence Transparency Collective Engagement Initiative, supported by institutional investors representing approximately €140 billion in combined assets under management.
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Apache Longbow helicopter on a training sortie
Global Advisory Alliance is launching the Defence Transparency Collective Engagement Initiative, supported by institutional investors representing approximately €140 billion in combined assets under management.
The initiative starts from a simple problem.
The defence investment debate has moved quickly. The information available to investors has not always moved with it.
For many institutional investors, the question is no longer simply whether they can invest in defence. It is how they understand, classify, monitor and explain that exposure - and whether they have the evidence needed to do so credibly.
That becomes increasingly difficult as the boundaries between civilian technology, dual-use applications and conventional defence become less clear.
Investors are navigating questions around product and revenue exposure, human-rights due diligence, export and end-use controls, board oversight, AI and autonomous technologies, supply chains and controversial weapons.
At the same time, the ESG data used to assess these issues can differ significantly in its definitions, classifications, methodology and underlying evidence.
"The convergence between advanced digital technologies and the defence sector is creating new challenges for investors. In this context, improving transparency and the quality of available information is essential to support effective stewardship, sound risk management, and informed long-term investment decisions” says Aldo Bonati, Stewardship and ESG Networks Manager at Etica Sgr. This initiative represents a valuable contribution to that objective."
From debate to evidence
The Defence Transparency Collective Engagement Initiative is designed to move the conversation from broad positioning to practical assessment.
It is not an initiative for or against investment in defence.
Nor is it another investment standard.
Its purpose is to improve the quality, consistency and decision-usefulness of the information institutional investors have available when assessing defence and dual-use exposure.
Working collectively, participating investors will engage selected European defence-related companies and major ESG data providers around a common set of transparency and governance questions.
The engagement will examine areas including:
- product and revenue transparency
- board and governance oversight
- human-rights due diligence
- end-use and end-user controls
- AI and dual-use technology safeguards
- supply-chain due diligence
- ESG data methodology, sourcing and classification
The data-provider work will also examine how uncertainty is handled, how investors and issuers can challenge potentially inaccurate classifications, and how exposure to Conflict-Affected and High-Risk Areas is assessed.
What will success look like?
We want this initiative to produce measurable outcomes rather than simply more meetings.
The pilot aims for substantive engagement with at least 75% of target companies and concrete improvement commitments from at least half of the companies engaged.
Success will ultimately depend on whether investors receive better evidence: clearer disclosure, improved governance information, better data and classifications, and verifiable progress against agreed commitments.
Participating investors will retain full discretion over how they use the findings within their own investment, stewardship, voting and risk processes.
Building the investor group
The initiative is being coordinated by Global Advisory Alliance (GAA) acting as Technical Secretariat.
We are now expanding the initial investor group ahead of the first engagement phase.
Investors joining at this stage will have an opportunity to help shape the final engagement priorities, company selection and ESG data-provider focus.
For institutional investors facing the same underlying challenge - how to make informed decisions when defence and dual-use exposure is increasingly complex but the underlying information remains fragmented - this is an opportunity to address that problem collectively.
The objective is straightforward:
Better transparency. Better evidence. Better-informed stewardship.
Institutional investors interested in participating in the Defence Transparency Collective Engagement Initiative are invited to contact Anna-Stina Wiklund and Karel Krticka at Global Advisory Alliance email: team@globaladvisoryalliance.com
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GAA - GLOBAL ADVISORY ALLIANCE
GAA - GLOBAL ADVISORY ALLIANCE
