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ARTICLE · 12 MAY 2026

Defense Investment Under EU Sustainable Finance Framework: No Structural Barriers

A&O Shearman
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The European Commission has clarified that the EU sustainable finance framework does not impose structural barriers to defense industry investment. This guidance addresses concerns raised in the Wennink report about financing obstacles for European defense companies, confirming that responsible defense investments can contribute to EU resilience and security while remaining compatible with ESG requirements.

NetherlandsGovernment, Public Sector
Jochem Spaans
Jochem Spaans
Axel de Backer
Axel de Backer
Caroline Obenhuijsen
Caroline Obenhuijsen
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Introduction

The Wennink report is clear: more investment in the European defense industry is needed. But do the EU sustainable finance framework and the CSDDD pose an obstacle to this? In this article from our series on the Wennink report, we explore how the growing need for defense investment interacts with recent regulatory clarifications by the European Commission (EC). The takeaway: the EU sustainable finance framework is compatible with investment in the EU defense industry.

Wennink report identifies opportunities…

The Wennink report emphasizes that the projected increase in NATO defense spending—from USD534 billion to USD1.25 trillion dollars over the next ten years—presents remarkable opportunities for the Dutch defense industry.

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