Realignment of Euronext’s ESG Strategy
The European exchange Euronext has announced a comprehensive overhaul of its ESG strategy to specifically promote European companies in the defense sector. These changes are related to current geopolitical developments and the growing need for Europe’s strategic autonomy in the areas of energy, security, and geostrategy.
Key Changes to the ESG Strategy
Renaming and Redefinition of ESG: In the future, ESG at Euronext will be equated with “Energy, Security, and Geostrategy” to align capital markets with Europe’s strategic autonomy goals. New indices will help represent companies strengthening resilience in the fields of energy, defense, technology, and infrastructure.
Regulatory Adjustments: Exclusion criteria will be restricted to prohibited armament activities to facilitate investments in the defense sector. Furthermore, the new ESMA guidelines for ESG funds will be taken into account.
Promotion of the Sector: With the introduction of the IPOReady solution in 2025, initial public offerings for companies in the defense sector are expected to be facilitated. In cooperation with the European Investment Bank, Euronext also aims to specifically support SMEs in the aerospace and defense sector.
Market Impacts
The promotion could lead to positive effects on stock prices, such as increased demand for shares of European defense companies and improved access to capital markets. Overall, the measures are expected to invigorate the investment environment and create more transparency in sustainable investments in the defense sector.