As conflicts intensify and security threats grow, defence spending has surged – private capital investments in defence-related sectors rose by 33% year-over-year in 2024. Heightened geopolitical tensions have prompted governments to reassess their security strategies and increase military expenditure. This upward trend presents investors with complex challenges around how to manage the associated risks of defence-related companies. The context is complex and dynamic. A set of robust Principles, implemented by a critical mass of investors, can help navigate this complexity and mitigate the financial, reputational, legal and human rights risks.
The Principles for Responsible Defence Investment (PRDI) will provide high-level guidance to investors who are grappling with the changing dynamics of defence-related companies and technologies. The PRDI will be designed to help investors carry out robust due diligence on such companies across a range of asset classes.
This Concept Note was co-created by investors and experts who believe defence-related investment decisions should be made responsibly. During the Familiarisation period, the PRDI Initiating Group will seek feedback, primarily from the investor community, on the proposals in this Concept Note and appetite for future involvement. We call on investors and wider stakeholders to support us in the development and implementation of robust and credible Principles and tools.