Private credit firms take aim at ESG for holding back financing for European defence

Private credit firms are reconsidering sustainable investment criteria to provide funding for Europe’s defence sector, which has gained urgency following US support concerns. While smaller funds can lend, many are restricted by environmental, social, and governance rules, particularly against financing weapons manufacturers; however, French officials are encouraging changes to these regulations. Despite these challenges, credit funds that have invested in defence have seen significant returns, and companies previously reliant on single lenders are now seeking multiple financing sources as interest in the sector rises.

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