Social Enterprise Arms Manufacturer – Would you invest? Vote now!

I’m doing a series of posts exploring the edges of social enterprise. In each instance I will create a poll for you to choose between:

  • This is a social enterprise and I would invest in it.
  • This is a social enterprise but I wouldn’t invest in it.
  • This isn’t a social enterprise and if someone else invested I would  question their credentials as a social investor.

After the poll I will put my own thoughts. If you have any questions you would like to put to the management of my fictitious social enterprise please ask a comment and I will endeavour to respond appropriately. In this instance they have some quite strong opinions.

Social enterprise arms manufacturer 

So, a group of ex-military types have got together. They have seen the horrors of war and in particular the impact on civilian populations. They have also been involved with clean up operations afterwards. They have ideas on how military hardware can be made easier to clean up and lower impact on non-combatants without impacting on its lethal effectiveness against the enemy.

In particular they have ideas for a clean up mechanism for mines, where an encrypted key can be used to make them safe and more easily detected with the relevant equipment that would only be available once hostilities were over. They are confident that they can make this work to the satisfaction of the military users of such equipment and that this would be a “route to salvation” for some of the larger non-signatories to the Ottawa Treaty on anti-personnel mines, including the US, Russia and China.

Their plan is to go to the arms manufacturers state customers to create an impetus behind “safe but lethal” weaponry. They then plan to work alongside the more sceptical manufacturers around design and the further research and development needed to move their ideas into implementation. They believe that over time they will build credibility with the manufacturers due to their military experience and complete comfort with, indeed enthusiasm for, weapons being as lethal as possible to the opposition.

They need investment, initially of £3m, rising to £10m for both the lobbying effort and to do the initial work on their designs to get them to the point of detailed designs and non lethal replicas which are important for arms fairs, a key part of the marketing cycle. The can’t get this from traditional commercial sources, though if they are successful, they should make a reasonable return on your investment.

This may appear an unconventional investment. Some of their opinions are uncompromising, but the intensity and seriousness of their interest in reducing civilian casualties, and enabling countries to rebuild after war cannot be questioned. Nor can the blood curdling stories on which that passion is based.


5 thoughts on “Social Enterprise Arms Manufacturer – Would you invest? Vote now!

  1. This is GOLD – Toby Eccles – I love how your mind works – thanks for pushing the boundaries on the way we think about this stuff! I would extend it to add that if they’re successful, there will be an enforced UN ban on traditional mines and these new ones would be the only ones in the market… and that they’d use their immense profits from their monopoly in the market to clean up all the old mines… and the mines are made from recycled plastic bags fished out of the ocean… and you probably still wouldn’t get many takers!

  2. For me this example demonstrates that there are two separate questions I would ask of an investment – is it ethical to invest in this, and is it a social investment? It can’t be the latter without being the former, but it could be ethical without necessarily being social. If you believe that investing in an arms manufacturer is never going to be ethical, then that rules out the possibility of considering it as a social investment. You could however take the position that producing weapons under certain circumstances is essential for peace and stability, and therefore this is a legitimate and necessary trade. If you do take that position, then you might say it’s a good thing to support companies that carry on their trade in a way that minimises their negative social or environmental impact. If arms manufacture doesn’t give you ethical troubles, you could just as easily replace it in this example with a company that produces certain chemical products and is investing in technologies to reduce pollution and ultimately harm to humans. To my mind that would make it a company with strong ethical priorities and sense of corporate responsibility. But it wouldn’t make it a social enterprise because creating positive social or environmental impact isn’t at the core of its reason for existence.

    On the basis of the first question I wouldn’t personally invest, though I don’t think I’d be morally appalled by anyone who wanted to encourage social responsibility in the arms industry. But either way, I think the answer to the second question has to be that this is not what I would call a social investment.

  3. Pingback: Would I invest? Part 2 on our arms manufacturing social enterprise | Musings on Finance and Social Change

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