Liam Kennedy

Pension policy was a hot political topic in Sweden in the 1990s – a debate that heralded a landmark policy to invest a small portion of workers’ contributions in capital markets. Some 30 years later, the same ideas are capturing the imaginations of European policymakers and think tanks. Most of the 2.5% that Swedes pay into the premium pension system flows to the default fund AP7, but workers can decide to choose their own fund managers from a pre-screened pool.

Many European pension funds are reviewing their allocations to the defence sector as they seek to recalibrate ESG criteria to embrace national and European strategic resilience. Defence exposure and ESG policies should be uncontroversial. Investors have the right to take positions. The underlying issues are nuanced and complex (transparency and corruption in the defence sector, for instance), and there may be specific issues for each investor to take into account.