Outrage at no cost

Posted on: 24 March 2026

You know this person. They share the right articles about Gaza, Ukraine, the arms trade. They sign the petitions. They use the correct language, the kind that marks you out as someone who pays attention. Then they close the laptop, open their banking app, and check how their sustainable ISA is doing. It has had rather a good year, as it happens. The connection does not get made. Or more accurately: the connection has been made structurally impossible to make, which is a different thing entirely and considerably more interesting.

This is not about bad faith. Bad faith would be easier to address.

Start with 2021, when the EU introduces SFDR, the Sustainable Finance Disclosure Regulation. The idea is that investment funds would finally have to classify themselves according to their actual environmental and social impact. Article 8 funds promote environmental and social characteristics. Article 9 funds have explicit sustainable investment objectives. Capital flows in, the ethically minded investor has a map, everyone is satisfied. For about five minutes.

What follows is a lobbying effort that makes most public awareness campaigns look amateurish. The European defence industry works, patiently and methodically, to persuade the Commission that "security" belongs within the definition of "sustainability." The argument runs roughly like this: without security there is no stability, without stability there is no green transition, therefore investing in defence is investing in a sustainable future. It is circular. It works.

Between 2021 and 2025, investment classified as green in the arms industry goes from 14.5 billion to 49.8 billion euros. More than three thousand ESG funds add defence holdings to their portfolios. Elbit Systems, Israel's largest arms manufacturer and directly involved in operations in Gaza, appears in climate transition funds with a green label attached. Not as an exception. As a feature.

The person who chose an ESG fund specifically to avoid financing the arms sector has no reliable way of knowing any of this. Not because they were careless. Because the category was quietly repositioned while they were looking elsewhere, and the obligation to inform them did not exist.

Which brings us to the part that tends to make people uncomfortable when you say it plainly. Handing your money to a financial adviser is not just a practical arrangement. It is a transfer of moral accountability. The adviser knows where the money goes. The client, on some level, prefers not to. Both get something from this. The adviser gets the fees. The client gets the returns and keeps their self-image undisturbed. The whole thing runs on unspoken agreement and works beautifully for everyone involved, which is precisely why nobody disrupts it.

Fund managers have every reason to maximise returns, and defence has delivered: sector equities have consistently outperformed the broader market since 2022. The Commission has every reason to pull private capital into a sector that public budgets cannot cover alone. The adviser has every reason to sell what performs. The client has every reason not to ask questions that might lead somewhere inconvenient. The system produces opacity not because anyone planned it that way but because opacity is what you get when every actor's incentives point in the same direction.

Back to the Guardian reader for a moment, because there is something specific worth saying about the British version of this story. Informational passivity around personal investments does not distribute itself evenly. It tends, oddly, to increase with education and portfolio size. The worker whose pension goes into a default workplace scheme has limited options and limited information, and the mitigating circumstances are genuine. The professional who reads two broadsheets before breakfast, who has opinions about Rafah and the ICC and the obligations of Western governments, and who has never opened the Key Investor Information Document for their Hargreaves Lansdown ISA: that passivity is a choice. It does not feel like one, which is rather the point.

Outrage functions, in this landscape, as a consumer good. It costs nothing, it is available in unlimited supply, and it provides something real: the ongoing sense of being a morally present person. A share, a comment, perhaps a direct debit to the right NGO. None of it requires looking at the portfolio. None of it requires a difficult conversation with the adviser. It occupies a completely separate register from economic behaviour, sealed off cleanly enough that both can run simultaneously in the same person without producing any friction worth noticing.

The worse things get geopolitically, the better defence equities perform, the better the ESG fund does, the more material there is for outrage. The cycle does not need anyone's conscious participation to keep going.

One question, then, which is not a moral one. When did you last actually look at what is in your portfolio?

Data on ESG investment in the defence sector from the IrpiMedia/Voxeurop investigation using London Stock Exchange Group data, published January 2026. European military expenditure data from the European Defence Agency, September 2025.