On November 26, 2025, the European Parliament approved a Commission proposal that fundamentally redefined which weapons are considered unacceptable for sustainable investment. The change replaced the term „controversial weapons“ with „prohibited weapons,“ limiting the scope to just four categories: anti-personnel mines, cluster munitions, chemical weapons, and biological weapons. Nuclear weapons are not included. Depleted uranium is not mentioned.

The vote passed with support from the European People’s Party (PPE) voting alongside far-right groups, over objections from The Left, Socialists, and Greens. One month later, on December 30, 2025, the European Commission formalized this new framework in an official Notice (C/2025/4950), establishing that EU sustainable finance rules are „compatible with investing in the defence sector“ and „set no limitations on the financing of any sector, including the defence sector.“

This regulatory shift matters because depleted uranium munitions are currently being used in Ukraine, creating permanent environmental contamination while funded by European investment vehicles labelled „sustainable.“

Depleted Uranium in the Ukraine Conflict

In March 2023, the UK Ministry of Defence announced it would supply depleted uranium ammunition for Challenger 2 tanks to Ukraine. The munitions arrived in April 2023. The United States followed in September 2023, including M829A4 120mm rounds in a $175 million aid package for M1A1 Abrams tanks.

Russia, which maintains its own DU arsenal for T-80 and T-90 tanks, responded sharply. In March 2023, Putin stated Moscow would be „forced to react,“ and in June declared: „We have a lot of such ammunition, with depleted uranium, and if they use them, we also reserve the right to use the same ammunition.“

The November 26 vote was not a minor technical adjustment. According to progressive parties in the European Parliament, the change „limits the scope of application of the types of weapons excluded to only four categories, specifically anti-personnel mines, cluster munitions, biological weapons and chemical weapons.“

Before this change, the framework referred to „controversial weapons“—a broader, more ambiguous term that could encompass weapons subject to ethical debate even if not banned by international treaty. The new term „prohibited weapons“ restricts the definition to weapons explicitly banned by conventions signed by a majority of EU member states.

The practical effect: weapons including nuclear arms, depleted uranium munitions, blinding laser weapons, non-detectable fragments, incendiary weapons like white phosphorus, and lethal autonomous weapons systems (killer robots) are no longer considered controversial for sustainable investment purposes.

The December 2025 Commission Notice

The Commission Notice published December 30, 2025 in the Official Journal provides official guidance on applying the EU sustainable finance framework to the defence industry. The document establishes several critical points that operationalize the November vote:

Defence as „social sustainability“: The Commission recognizes the defence industry as a „crucial contributor to the resilience and security of the Union, and therefore to peace and social sustainability.“ It cites UN Sustainable Development Goal 16 (Peace, justice and strong institutions) as justification.

Confirmed four-category limit: The Notice explicitly confirms that only four categories require disclosure under Principal Adverse Impact (PAI) indicator 14: anti-personnel mines, cluster munitions, chemical weapons, and biological weapons. The absence of depleted uranium from this list is deliberate.

No financing restrictions: „The Commission recalls that the sustainable finance framework is fully consistent with the EU’s efforts to facilitate the European defence industry’s access to sufficient finance and investment. It does not impose any limitations on the financing of the defence sector.“

No revenue-based exclusions: The Commission explicitly discourages operators from excluding defence companies based on revenue thresholds, arguing this would „particularly penalise SMEs (Small and medium-sized enterprises, nda).“

Case-by-case approach: The Notice encourages financial operators to assess defence investments individually rather than applying sector-wide exclusions.

This framework creates a structure where weapons production—including depleted uranium munitions that contaminate for millennia—becomes compatible with ESG criteria as long as weapons serve „defensive“ purposes.

The ESG Investment Paradox

According to investigations by Il Fatto Quotidiano, Voxeurop, and Avvenire published in late 2024, European funds marketed as „sustainable“ invest in arms manufacturers. Among companies receiving such investments is General Dynamics, confirmed producer of the M829 depleted uranium munitions sent to Ukraine by the United States.

The November-December 2025 regulatory changes formalize what had been emerging practice. Billions in „green“ investments can now officially finance production of weapons whose environmental and health impacts contradict conventional definitions of sustainability, as long as they fall outside the four prohibited categories.

The distinction between „offensive“ and „defensive“ weapons that underlies the Commission’s logic is arbitrary and environmentally meaningless: a depleted uranium round contaminates regardless of who fires it or why. The munition’s physical properties—uranium-238’s 4.5 billion year half-life, the toxic dust it creates, the permanent soil contamination it causes—remain identical whether fired in attack or defence.

Environmental and Health Evidence

Scientific evidence from Iraq and the Balkans shows correlations between DU exposure and birth defects, cancers, and immune system damage. Environmental contamination persists across generations. DU dust produced when munitions burn is readily inhaled and retained in lungs. From lungs, uranium compounds deposit in lymph nodes, bones, brain, and reproductive organs.

Depleted uranium use in Ukraine creates immediate risks for combatants and long-term environmental liabilities. Ukrainian agricultural lands, among Europe’s most fertile, face potential long-term contamination. Post-conflict reconstruction will require remediation of contaminated areas—a technically complex and expensive process that, as demonstrated in Iraq, often remains inadequate.

Retail investors—ordinary citizens investing through pension or mutual funds—often lack knowledge of actual portfolio contents. The November vote and December Notice do not address this transparency deficit. Instead, the Notice encourages operators „to not treat defence as a de facto non-contributing sector in their assessment of sectors which make a positive contribution towards social sustainability.“

This creates a situation where:

• Funds can invest in weapons manufacturers while maintaining ESG labels (Environment, Social and Governance)
• „Prohibited weapons“ exclude only four specific categories
• Depleted uranium, nuclear weapons, and conventional arms are not considered prohibited
• Investors have limited ability to identify defence holdings in „sustainable“ portfolios
• The regulatory framework actively discourages sector-wide exclusions

The Commission Notice states that „excluding the defence industry as such would not be consistent with applicable legal framework“ and that „generalised exclusions of the defence sector based on turnover would not be consistent with a case-by-case logic.“

The Ukraine war has driven a boom in European defence manufacturing. The November vote and December Notice are not incidental—they provide regulatory certainty for this expansion. Published as part of broader EU efforts to strengthen defence industry financing, they accompany the European Defence Industrial Strategy and the Joint White Paper for European Defence Readiness 2030.

The December Notice formalizes this political shift into regulatory guidance. Three years after initial relaxation of ESG (Environment, Social and Governance) criteria in 2023, the Commission has now provided official documentation that defence investments—with four specific exceptions—are compatible with sustainable finance.

This reasoning allows depleted uranium munitions—which contaminate soils for millennia, release toxic dust into food chains, create permanent environmental sacrifice zones, and violate precautionary environmental principles—to be financed by funds labelled „sustainable“ as long as they serve „defensive“ purposes and fall outside the four prohibited categories.

Stefania Divertito,

Environmental journalist, ICBUW member