A new reality is reshaping responsible investing
The global landscape is changing. Geopolitical shifts, changing international relations and new policy frameworks are pushing Europe towards greater strategic autonomy. This new dynamic is not a problem for responsible investing, but confirmation of what sustainable development means today: not only environmental and social progress, but also strengthening peace, security and strong institutions. This aligns closely with United Nations Sustainable Development Goal 16.
Nathalie Bally, Responsible Investing Expert at KBC Asset Management, explains how this broader view translates into the Responsible Investing (RI) policy and what this means in practice for RI investors.
Sustainable development can only thrive in a stable and secure society. Europe is taking more responsibility for its own security now, and this requires a thoughtful and balanced approach from asset managers as well.
Nathalie Bally, Responsible Investing Expert at KBC Asset Management
Europe is taking responsibility
The international context has changed substantially in recent years. Europe is actively building more strategic independence, both economically and in terms of security. In that context, the European Union is increasing its defence efforts and encouraging cooperation within a clear legal and ethical framework.
This evolution aligns with a broader view on sustainability. Security and stability are required for social progress, economic resilience and the protection of democratic values.
The European Commission also explicitly confirmed that, under strict conditions, investments in the defence industry are compatible with the European Sustainable Finance Disclosure Regulation. KBC endorses that vision and wants to contribute to a credible European defence policy to ensure lasting peace.
Defence and responsible investing: a nuanced approach
Defence remains a sensitive theme within responsible investing, but the United Nations recognises the right to self-defence and the importance of strong institutions to ensure peace and stability.
Responsible investing does not mean we avoid complex social issues. It just means that we approach them in a careful, transparent and principled way.
Nathalie Bally, Responsible Investing Expert at KBC Asset Management
KBC is reviewing its RI policy based on this belief; not by abandoning fundamental values, but by applying them to a changing reality. This is translated into a limited and strictly defined openness towards non-controversial defence activities, but only under strict conditions.
What is changing in our RI methodology?
We closely monitor current events and regularly review our Responsible Investment policy to ensure it stays in line with both the changing global landscape and the philosophy of responsible investing. This is a matter of striking new balances within our RI methodology. That’s why we’re adjusting some of our exclusion criteria in 2026. In doing so, we’re giving due attention to transparency and consistency while making sure to further refine our methodology and remain aligned with European regulations.
This means that under strict conditions, we now allow companies where the production of conventional weapons makes up only a limited portion of their activities. Companies that derive a higher portion of their turnover from such weapons, or that are involved in nuclear weapons, will also no longer be excluded automatically. These are assessed individually and can only be included in our responsible funds when they meet clear and strict criteria. It’s important to note that companies involved in controversial weapons will continue to be excluded.
For countries, the threshold for defining particularly high military spending as share of gross domestic product will be raised in order to better align our approach with international agreements and the current geopolitical context.
Finally, the policy around fossil fuels will also be refined, meaning that companies only involved in the transport or storage of fossil fuels will be allowed if they meet certain conditions. However, companies that mine or generate electricity from fossil fuels will continue to be fully excluded.
These changes apply to almost all of our Article 8 and Article 9 funds, i.e. all sustainable and responsible investment funds and investment-type insurance products.
Responsible investing: values and realism
Responsible investing undoubtedly remains the future. The energy transition is irreversible, but sustainability today also requires us to adopt a wider view. By expressly including security, governance and transparency in our RI policy, we strengthen its credibility and relevance.
Nathalie Bally, Responsible Investing Expert at KBC Asset Management
The 2026 update to our RI policy reflects this balancing act. KBC Asset Management consciously opts for a policy that combines sustainability, security and social responsibility – in the interest of investors and society.
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The information contained in this publication is for information purposes only and should not be considered as investment advice.
