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1 Apr 2025 – Articles

Danske Bank expands its investment universe for defence shares

In light of the new geopolitical reality and shifting requests and preferences from investors, Danske Bank has reviewed its investment policies and exclusion lists for companies operating in the defence industry. As a result, the investment universe is now being expanded.

Look over Copenhagen

At Danske Bank, we have carried out a review of our investment policies and exclusion lists covering the area of defence. The investment policies and exclusion lists govern which companies our asset management business at Danske Bank Asset Management and Danica can invest in.

As a result of the review, we are expanding our investment universe to include a further 30 or so companies, which have consequently been removed from our exclusion lists. This adjustment comes in the wake of several other adjustments made in 2024, and across our restrictions for controversial weapons and military equipment, we have expanded our defence shares-related investment universe by approximately 200 companies within the last year.

Among other things, the latest adjustments mean that it is now possible for us to invest in practically all European companies in the defence industry.

“We maintain an ongoing focus on ensuring that our Responsible Investment Policy reflects developments in society and mirrors the requests and preferences of our investors, thereby ensuring that we continue to meet our commitment to deliver competitive returns on a responsible basis. This latest adjustment to our restrictions is a step that we have taken following thorough research and careful consideration,” says Erik Eliasson, Head of Responsible Investment at Danske Bank.

Erik Eliasson

We have seen a markedly sharper focus on the need for stronger defences in Europe, and both the European Commission and the Danish government have highlighted the need for large investments in the defence industry over the coming years.

Erik Eliasson

Head of Responsible Investment, Danske Bank



A natural consequence of geopolitical developments
Erik Eliasson characterises the adjustments related to the defence area as a natural consequence of the recent years’ geopolitical developments.

“We have seen a markedly sharper focus on the need for stronger defences in Europe, and both the European Commission and the Danish government have highlighted the need for large investments in the defence industry over the coming years. Additionally, we have seen a noticeable change among our investment customers in terms of their general attitude towards investment in defence shares, which has now become a lot less restrictive,” explains Erik Eliasson.


Thomas Otbo

The geopolitical developments seen during the past couple of months have triggered some large movements in Europe that also have an impact on economic growth and interest rate trends. This also has broader knock-on effects for the equity and foreign exchange markets, which is why defence is a theme that we monitor very closely at multiple levels.

Thomas Otbo

Chief Investment Officer, Danske Bank Asset Management



Increase in defence investments
Even though our decision to reduce the number of companies on our exclusion lists now paves the way for additional investment options in our asset management activities, the geopolitical situation and the increased demand for defence equipment have for a long time been cause for us at Danske Bank Asset Management to focus on investment in defence shares.

“Over the past two years, we have more than doubled our total assets under management related to companies generating revenue from arms and other military equipment. For instance, defence has been a separate investment theme in our equity strategy across our balanced portfolio solutions, and we also offer tailor-made defence equity solutions for institutional clients,” explains Thomas Otbo, Chief Investment Officer at Danske Bank Asset Management.

Knock-on effects and investment opportunities
Thomas Otbo points out, however, that defence shares still represent a very small proportion of the global equity market. He also describes defence as a theme that encompasses many elements other than investments in arms manufacturers.

“The geopolitical developments seen during the past couple of months have triggered some large movements in Europe that also have an impact on economic growth and interest rate trends – for instance via the prospects of large debt-financed defence investments in Germany. This also has broader knock-on effects for the equity and foreign exchange markets, which is why defence is a theme that we monitor very closely at multiple levels,” he says.


Danske Bank’s approach to defence shares

At Danske Bank, we recognise the right of nations to use legal weapons for national self-defence and legitimate national security purposes, as set out in the Charter of the United Nations. Additionally, we respect a series of international conventions in relation to illegal weapons.


  • Our investment products are subject to our restrictions on controversial weapons that include a number of weapon types that are banned in accordance with international conventions. These are cluster bombs, anti-personnel mines, biological and chemical weapons as well as nuclear weapon activities that are not in accordance with the Treaty on the Non-Proliferation of Nuclear Weapons.

    The new adjustments to our restrictions related to defence shares mean that we are removing restrictions on various types of weapons that are not banned under international conventions.

  • A number of specific investment products are subject to stricter restrictions regarding military equipment, including investment products targeted towards customers who prefer not to invest in military equipment. This is the case for Danske Invest funds with a sustainable objective, for instance. For these funds, combat equipment such as tanks, munitions and missiles are excluded, but other types such as radar systems, military software and surveillance vessels are not.



Updated exclusion lists to follow later this year
The new adjustments to our exclusion lists are expected to be fully implemented in our portfolio during May this year. All investments in defence shares will of course still be carried out within the framework of Danske Bank's Responsible Investment Policy. 

For investment-related and regulatory reasons, we cannot at present say precisely which companies will be removed from our exclusion lists as a result of the adjustment of our restrictions. The updated exclusion lists will be published later this year.

For customers looking for a more restrictive approach to investment in defence shares, we still offer a number of Danske Invest funds and other investment solutions that do not include military equipment in the portfolios.