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<p>Trade associations and individual companies have raised the issue of ESG in discussions
with Ministers and officials from across government.</p><p> </p><p>While we have so
far seen no evidence that ESG criteria are leading to increased procurement costs,
we are aware of instances where companies, particularly SMEs, have found obstacles
to accessing financial services.</p><p> </p><p>Officials across Government are working
closely with trade associations and the financial sector to understand the nature
and extent of the issue, and agree mitigating actions where appropriate. The Government
is unequivocal that there is nothing unethical about investing in and providing financial
services to the UK defence sector and the financial services sector should not be
disadvantaging companies based on their association with defence. On the contrary,
a strong national defence is a pre-requisite for the freedoms and rule of law that
we often take for granted.</p><p> </p><p>Industry and Government are also showing
leadership on all aspects of the ESG agenda as illustrated by the recent launch of
the Defence Aviation Net Zero Strategy. We will continue this work with our industrial
partners to explore and champion the wider environmental and social benefit of the
defence sector.</p>
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