Below is an excerpt from ISS ESG’s recently released paper “Military Sales Flying High: Recent Trends in Aerospace and Defence” The full paper is available for download from the Institutional Shareholder Services (ISS) online library.
KEY TAKEAWAYS
- Amid plummeting commercial aerospace sales and rising global defence spending, military sales within the aerospace industry are accounting for a greater proportion of overall revenue compared to pre-pandemic times.
- With the commercial aerospace industry set for a long recovery, this trend is likely to continue in the near term.
- Investors concerned about corporate involvement in military equipment and services are thus expected to face exposure to higher military sales from traditionally commercially-focused aerospace companies.
- According to an analysis of ISS ESG data, ‘Information Technology’ (IT) is now the GICS sector with the second highest involvement in military equipment and services, after the established ‘Industrials’ sector which includes the Aerospace & Defence industry.
- With technological shifts in military requirements, investors are being challenged to broaden their view of companies involved in military-related activities outside of traditional industries.
Explore ISS ESG solutions mentioned in this report:
- Use ISS ESG Sector-Based Screening to assess companies’ involvement in a wide range of products and services such as alcohol, animal welfare, cannabis, for-profit correctional facilities, gambling, pornography, tobacco and more.
By Aaron Whelan, Associate, ISS ESG Karl Johansson, Junior Analyst, ISS ESG Verena Simmel, Senior Associate, ISS ESG
