It’s no secret that the investment world, and the corporate world writ large, has shifted substantially away from the term ESG.

We’ve covered before that the acronym has become tainted, as its use as an investment North Star has become heavily politicised. Many investments funds and company initiatives have reframed themselves as sustainable finance or similar terms.

But news this week that one of Europe’s key stock exchanges has rebranded its own approach to ESG to ensure it can embrace the defence sector may signal changes that make it less contentious, although still with the potential for some controversy.

In a series of new measures, the Euronext exchange announced that it would revisit the methodologies for ESG indexes to limit the exclusions currently placed on defence companies and encourage ratings agencies, “to restrict the concept of controversial weapons only to armament activities prohibited by relevant international treaties”.

The question of whether defence stocks can be considered ESG-friendly on the grounds that they protect societies is not a new one. A recent Financial Times article asked whether companies that produce defensive weapons, such as those designed to shoot down and intercept enemy missiles or drones, would be seen as more positive.

It even suggested that some investment funds might be able to rebadge themselves as ESSG environmental, social, security and governance.

Investors Chronicle has also made a case for a rethink of defence being seen as an “ethical” investment given new geopolitical tensions, outlining why politicians increasingly saw a need for defence investment to be embraced more widely and positively as European countries seek to increase defence spending and capitalise on the economic growth that could also produce.

More than 100 Labour MPs and peers have also urged banks and investment firms to relax their rules on such investments, in a letter arguing that ESG mechanisms should be rethought.

Given the shake-up and repositioning of ESG more broadly, it’s fairly easy to imagine a time when the defence sector will be embraced as part of sustainable investment parameters. The Financial Conduct Authority has also said there is nothing in its rules that stands in the way. A recent long-read in The Times outlining economic and investment considerations across Europe made similar points.

Expect defence and security companies to embrace the shift in attitudes themselves, and for the sector to be a factor that could change the nature of ESG frameworks and definitions on a wider basis.