Duration
1h
Speakers
6
Delivery
Online
Executive Briefing Insights: Fiduciary Duty, Stewardship and Responsible Investment in Europe, North America and Asia-Pacific.
"This page brings together insights, research and practical resources from the Global Advisory Alliance's international executive briefing series on defence investment. Drawing on discussions with institutional investors, asset managers and stewardship experts across Europe, North America and APAC, it examines how evolving geopolitical risks, defence spending and dual-use technologies are reshaping investor decision-making and stewardship expectations." — Anna-Stina Wiklund | Defence Stewardship Lead
Asia-Pacific Investor Briefing - Executive Summary
Asia-Pacific investors are confronting defence-related exposures in a regional context shaped by long-standing security tensions, rising defence spending and rapid technological change. The discussion showed that the region is not simply following the European or North American debate. Instead, investors are increasingly asking how responsible investment frameworks can be applied across portfolios where semiconductors, cloud services, robotics, gaming, artificial intelligence and other commercial technologies may also serve military purposes.A defining theme was the growing mismatch between traditional investment tools and the realities of modern defence exposure. Revenue-based classifications and conventional ESG datasets can struggle to capture the role of dual-use technologies, while data on conflict-affected and high-risk areas (CAHRA), product end-use and customer relationships remains incomplete. For large diversified portfolios, the practical challenge is therefore one of prioritisation: identifying the indicators that warrant deeper duediligence, engagement or escalation.The panel also emphasised that stewardship has a particularly important role where regulation and disclosure lag technological development. Investors can use engagement not only to seek improvements in governance and transparency, but also as an information-gathering tool—asking questions that external data providers cannot answer about human rights due diligence, end-use controls, AI governance and meaningful human oversight.Across the session, the emerging APAC approach could be characterised as increasingly contextual: retaining clear red lines around controversial weapons, while building more granular analysis of defence and dual-use exposure through governance, human rights, resilience, transparency and activestewardship.
Part I – A Distinct Asia-Pacific Context
The global reassessment of defence investment since 2022 is also visible in Asia-Pacific, but the drivers are different. European discussions have been heavily shaped by Russia’s invasion of Ukraine, while North American investors have often focused on financial materiality and the growth of defence-related technologies. In Asia-Pacific, the conversation sits against long-standing regional tensions, changing security relationships and a technology ecosystem that is deeply embedded in global portfolios.“The technology driving that spending is very much present in the APAC portfolios—so chips, cloud,
robotics, AI platforms, etc.”— Yumi Fujita, RobecoThe panel noted that rising defence spending may also be changing the economics of defence businesses in parts of the region, including Japan and South Korea. At the same time, the investment implications extend well beyond traditional defence primes. Commercial companies are entering partnerships, joint ventures and acquisitions that can create new defence exposure without fitting conventional sector classifications.For investors in Australia and New Zealand, the debate also has a strong beneficiary and communications dimension. Public concern about armed conflict and human rights is increasing scrutiny of how funds describe exclusions, exposure and portfolio holdings. This makes precision in policy language particularly important.“The exposure needs to be really clearly stated... what do you mean by exposure? Do you mean the production of weapons, the development, the assembly... what do you do about the dual-use tech?”— Estelle Parker, Responsible Investment Association AustralasiaThis creates a dual responsibility: investors need sufficiently nuanced analysis internally, while ensuring that external claims about exclusions or responsible investment remain consistent with investment strategy, legal documentation and actual holdings.
Part II – Dual-Use Technology and the Limits of Traditional Data
One of the strongest messages from the webinar was that traditional product and revenue-based screening is becoming less effective as defence exposure moves into technology layers that serve both civilian and military applications.“The dual-use landscape had become really too nuanced... for a blunt instrument, like exclusion policy.”
— Yumi Fujita, RobecoA semiconductor, cloud platform, AI model, drone, gaming technology or industrial product may have multiple end uses. The same product can appear commercially ordinary at the revenue-line level while being embedded in military systems or conflict-related applications. This means that traditional classifications may provide continuity, but cannot be the sole basis for evaluating risk.“The revenue line... is helpful for continuity... but it cannot be the only thing that we analyse a
company, or the whole situation.”
— Christine Chow, global investment leader and former Managing Director at UBS Asset
ManagementThe practical difficulty becomes even more acute when investors seek to assess exposure to conflict - affected and high-risk areas. Panelists described a decline in the availability of some CAHRA-related datasets and highlighted the challenge of translating broad legal and responsible investment frameworks into company-level signals across large portfolios.“What are those indicators? Which company is doing what, exactly, becomes that trigger forescalation or concern that we then want to take additional steps on?”— Jillian Reid, MercerRather than expecting one definitive list of “responsible” or “irresponsible” defence companies, the discussion pointed toward triangulation. Investors may need to combine ESG data, governance indicators, regulatory filings, contract disclosures, UN databases, specialised research, investigative reporting and direct engagement.Several practical information needs emerged:• clearer identification of conflict-affected and high-risk area exposure;• company-level indicators that can trigger deeper investigation;• better understanding of customer and end-use controls;• greater transparency around sovereign customers, exports and supply chains;• more granular analysis of partnerships, acquisitions and dual-use applications; and• data that can support prioritisation across public equities, fixed income, sovereign debt and private markets.The dialogue between investors and data providers was therefore presented as part of the solution. Rather than asking providers for a single verified list, investors can define which indicators are most useful for identifying red flags and determining whether
Part III – Stewardship, Human Rights and AI Governance
The APAC discussion placed particular emphasis on stewardship as both a risk-management tool and a source of investment information. Where data is incomplete, direct dialogue with companies can help investors understand whether appropriate governance exists around product use, government customers, AI systems and downstream human rights risks.“Part of what we are doing is really asking questions that data providers cannot answer.”
— Yumi Fujita, RobecoExamples discussed during the session illustrated that stewardship on dual-use technology is not new. Engagement with Asian technology and industrial companies has previously led to strengthened compliance functions, third-party human rights assessments and improved disclosure. What is changing is the scale and speed at which civilian technologies are becoming relevant to defence applications. This becomes especially important for autonomous and AI-enabled systems. The panel stressed that “human in the loop” cannot be treated as a simple checkbox at the moment of deployment. Investors may need to understand how accountability, training data, decision thresholds and human oversight are embedded throughout the design and development process.“We expect companies developing AI-enabled systems to have a documented policy on human
control and accountability requirements at every stage of the product lifecycle.”
— Yumi Fujita, RobecoChristine Chow similarly highlighted the importance of investor judgement when companies enter new defence partnerships or acquisitions. These transition points can create a particularly useful moment for stewardship, because investors can ask why the partnership is being pursued, how it may change the company’s business model, what governance applies and how much control the company retains over the intended use of its technology.“That is where the investor stewardship power can be amplified if we have a strong framework that
underpins it.”
— Christine ChowThe discussion also reinforced the continued relevance of the UN Guiding Principles on Business and Human Rights, international humanitarian law, the RIAA Investor Toolkit on Human Rights and Armed Conflict, and the forthcoming Guidance on Responsible Investment in Defence (GRID). These frameworks do not remove the need for investor judgement, but they can provide a structured basis for assessing severity, company involvement, governance, exports, end-use, transparency and accountability.
Concluding Reflections
The Asia-Pacific webinar suggested that responsible investment in defence is increasingly becoming a question of how investors govern complexity. The region combines rising defence expenditure, significant technology exposure, diverse security relationships and strong stakeholder expectations—while the information available to investors remains uneven.Several observations emerged consistently throughout the session:• Dual-use exposure is becoming a mainstream portfolio issue. Defence-related risk increasingly sits within technology, industrial and consumer-facing companies as well as traditional defence contractors.• Revenue screens remain useful, but insufficient. Investors need to understand context, intended use, partnerships, customer relationships and governance rather than relying on a single percentage threshold. CAHRA and company-level data remain a major implementation gap. The practical need is for indicators that help investors prioritise where deeper due diligence is required.• Engagement is an information-gathering mechanism as well as a stewardship tool. Company responses—and the absence of adequate responses—can themselves be material inputs into investment decision-making.• Human rights and AI governance require lifecycle thinking. End-use due diligence, meaningful human control and accountability need to be considered from design through deployment.• Collective capacity-building matters. Dialogue among investors, data providers, companies and standard-setters can accelerate practical solutions where no single dataset or framework is sufficient. Ultimately, the session did not point toward one universal APAC position on defence investment. Instead, it showed an investor community moving toward more granular, evidence-based and stewardship-led approaches. In a region where the boundaries between commercial technology and national security are becoming increasingly difficult to draw, robust governance, human rights due diligence, transparent communication and informed investor judgement will be central to responsible investment practice.
North America Investor Briefing - Executive Summary
North American institutional investors are operating in an increasingly complex geopolitical environment in which defence-related exposures have become a mainstream portfolio consideration. Since Russia's invasion of Ukraine in 2022, alongside broader geopolitical instability and accelerating technological change, many investors have re-examined how defence fits within fiduciary duty, responsible investment, and long-term risk management.While debates in Europe have often centred on evolving regulatory frameworks and exclusion policies, the North American discussion focused primarily on implementation: how investors can conduct effective due diligence, assess governance, and manage increasingly complex technology exposures.Across the discussion, panelists highlighted that defence can no longer be understood solely through traditional defence manufacturers. Artificial intelligence, semiconductors, cloud computing, cyber capabilities and other dual-use technologies increasingly serve both commercial and national security purposes, making company classification significantly more complex.Rather than advocating a single investment approach, the discussion explored how investors can make better-informed decisions where defence exposure exists. Themes including governance, export controls, human rights due diligence, data quality and active stewardship emerged as essential components of responsible investment practice.
Part I - Defence as a Mainstream Investment Consideration
Global geopolitical developments have fundamentally altered how many institutional investors view defence-related investments. What was previously treated primarily as a values-based exclusion issue has increasingly become a question of fiduciary oversight, portfolio resilience and long-term risk management.As moderator Dominic Webb observed:"Since the Russian invasion of Ukraine in 2022, defence investment has undergone something of a renaissance... leading to many investors re-evaluating their exclusion policies."
The discussion recognised that defence investment remains an area where institutions continue to hold differing views. However, there was broad agreement that investors require more sophisticated approaches to understanding defence exposure than were common only a few years ago.One important driver of this change is the growing convergence between commercial technology and national security.As Lauren Compere of Boston Common Asset Management noted:"You've got now AI, semiconductor companies, cloud companies operating in both a commercial and a national security market sense. And that's really important context."
This convergence means that defence exposure increasingly extends beyond traditional aerospace and defence contractors into technology companies whose products serve both civilian and military applications.Maria Lettini of US SIF similarly observed that many investors are evolving beyond purely exclusion-based approaches towards more nuanced assessments of company conduct and governance."The landscape has changed... moving away from blanket screening to really doing your due diligence, which varies by subsector, really puts a lot of the onus and the responsibility on investors."
Part II - Dual-Use Technologies, Governance and Human Rights
A recurring theme throughout the discussion was the increasing complexity created by dual-use technologies.Artificial intelligence, semiconductors, cloud infrastructure and advanced software increasingly underpin both commercial innovation and national defence capabilities. This interconnectedness makes it more difficult to assess companies using traditional sector classifications or simple revenue thresholds.As Sam Jones of the Heartland Initiative explained:"You can't do portfolio analysis in defence tech like that. You have too many through lines that run through it... it is how their products run through systems interoperability between civilian use, dual use, and defence use."
Panelists suggested that this changing landscape requires investors to place greater emphasis on governance processes rather than relying solely on product-based screens.Several practical governance considerations emerged:+ understanding how companies manage export control obligations;+ assessing governance surrounding customer selection and end-use controls;+ evaluating oversight of dual-use technologies;+ considering how companies identify and manage human rights risks throughout their value chains;+ understanding how boards oversee emerging technologies with potentially significant societal impacts.The discussion also highlighted increasing investor attention to autonomous systems and AI-enabled technologies, particularly regarding accountability, transparency and human oversight.An illustration of these broader governance themes was provided through recent shareholder engagement with Palantir Technologies.As Maggie Childe of UBC Investment Management explained:"In June... a coalition of institutional investors... challenged Palantir's governance on human rights, surveillance, technology, and political transparency... urging the company to conduct a human rights impact assessment."
The example illustrated how stewardship increasingly focuses not only on products themselves, but also on governance structures, transparency and corporate decision-making.
Part III - From Data Challenges to Practical Stewardship
A consistent message throughout the webinar was that investors cannot rely exclusively on traditional ESG datasets when assessing defence-related risks.Instead, effective analysis increasingly requires combining multiple information sources, including company disclosures, specialised research, open-source intelligence, government publications and direct company engagement.Rather than replacing external ESG data providers, investors described the need to supplement available information with their own internal due diligence, particularly where defence technologies or conflict-affected regions are involved.Several practical frameworks were discussed as supporting this work.
The UN Guiding Principles on Business and Human Rights
The UN Guiding Principles provide an internationally recognised framework for understanding corporate responsibility and investor expectations regarding human rights.As Maggie Childe noted:"The state has that duty to protect, the corporates and investors have that duty to respect... For investors, that really does come down to heightened due diligence."
The discussion emphasised that heightened due diligence becomes particularly important where companies operate in conflict-affected or high-risk areas or where technologies may have significant downstream impacts.
The GRID Initiative
Panelists also discussed the forthcoming Guidance on Responsible Investment in Defence (GRID), currently being developed through collaboration between investors and civil society organisations.As Sam Jones explained:"It doesn't seek to reconcile the irreconcilable... But rather, if investors elect to invest in the defence industry, the guidance seeks to help them do so responsibly."
Rather than prescribing investment outcomes, the initiative aims to provide practical guidance for governance, due diligence and stewardship.
Strengthening Stewardship
Across the discussion, participants highlighted several areas where stewardship practices are continuing to evolve:+ integrating human rights considerations more systematically into investment analysis;+ strengthening governance assessments around export controls, end-use and customer oversight;making greater use of collaborative engagement initiatives;+ improving dialogue with portfolio companies on transparency and disclosure;encouraging closer collaboration between public and private market investment teams when assessing dual-use technologies.The discussion also recognised the growing importance of private markets, where many emerging defence technologies are first developed. This places increasing importance on dialogue between limited partners, general partners and portfolio companies.
Concluding Reflections
The webinar demonstrated that defence is becoming an increasingly important topic for institutional investors—not because consensus has emerged on whether investors should invest in the sector, but because the questions surrounding defence exposure have become significantly more complex.Rather than focusing solely on inclusion or exclusion decisions, the discussion centred on how investors can exercise informed judgement where defence exposure exists.Several observations emerged consistently throughout the session:+ Governance matters as much as products. Investors increasingly seek to understand how companies govern technologies, manage export controls and oversee downstream risks.+ Human rights due diligence remains fundamental. International frameworks such as the UN Guiding Principles continue to provide an important foundation for investor expectations, particularly in conflict-affected and high-risk contexts.+ Traditional classifications are becoming less effective. The rapid expansion of dual-use technologies requires more sophisticated approaches than simple sector or revenue screens alone.+ Stewardship is becoming increasingly important. Active engagement, improved disclosure and collaborative initiatives can help investors address information gaps and encourage stronger corporate governance.Ultimately, the discussion suggested that responsible investment in the defence context increasingly depends on robust governance, informed due diligence and meaningful transparency.As technology continues to reshape both commercial markets and national security, investors will require practical tools and collaborative approaches to navigate this evolving landscape with confidence.
Replay - Investor Discussion - North America Stewardship Dialogue (online) - 8 July 2026, GAA & Canadian Coalition for Good Governance.
EU Investor Briefing - Executive Summary
European investors are navigating a structural shift in how defence is considered within responsible investment frameworks. Since 2022, geopolitical developments - most notably Russia’s invasion of Ukraine - have triggered reassessments of long-standing exclusion policies and accelerated demand for more structured investment approaches.While defence is increasingly recognised as linked to national resilience and democratic stability, it remains one of the most complex sectors from an environmental, social, and governance perspective. Regulatory frameworks do not prohibit defence investment, but they do require investors to justify, assess, and disclose their decisions.At the centre of this evolving landscape lies fiduciary duty: the responsibility to act in the long-term interests of beneficiaries while navigating growing geopolitical uncertainty.
Part I - A Changing Security Landscape for European Investors
Across Europe, defence investment has moved from the margins of responsible investment discussions to the centre of fiduciary debate.As moderator Dominic Webb observed:“Since the Russian invasion of Ukraine, defense investment has undergone something of a renaissance.” — Dominic Webb, Responsible InvestorThis shift has not occurred uniformly across Europe. In Northern Europe, responsible investment policies have evolved rapidly, particularly among pension funds and faith-based investors. “Previously, many investors relied on broad exclusions. Since 2022, we have seen more nuanced discussions emerging about what responsible defence investment actually means.”— Anna-Stina Wiklund, Global Advisory AllianceAt the same time, many institutions, particularly those with strong value-based mandates have reaffirmed their ethical boundaries.“Those aren't constraints on our fiduciary duty. They are our fiduciary duty, and we should not generate returns from activities that contradict our mission.” — Linda Sundberg, Church of SwedenThis reflects a defining characteristic of the current landscape: different institutions are reaching different conclusions, but through increasingly structured reasoning.