Ammunition Industry ESG Thematic Report, 2023

Environmental, Social, and Governance (ESG) in the Ammunition Industry

The policies that impact environment, social, governance, which involves the companies, consumers, and the governments, are shaping the current trend in the investments in unprecedented manner.

The ammunition industry is one of the markets, which is highly controversial when considered through the ESG lens, since there are reports of a large number of human right violations resulting from the products of the sector as well as the products that it develops creates a significant impact on the environment in terms of operations, causing ecological degradation.

Increase in global conflicts and the demand for sporting and hunting, is a major driving factor in the incline in demand of ammunition. Leading companies in this sector have conducted business with international states (various countries), where the reports of violation and abuse of human rights violations have been reported.

Key Trends

Major leaders of the industry are aware of global conflicts and human rights violations due to the products developed by these companies. They also cause significant environmental degradation due to their production operations.

The emissions of GHG (Greenhouse Gases) are a consequence of the production operation of ammunition due to which there is a direct increase in the negative impact on climate change. To combat this, top companies in the sector have developed sustainability policies, which deal with reducing scope 1 & 2 emissions as well as the responsible use of natural resources. One of the key players in the market based out of the U.S., has a due diligence policy towards utilization of natural resources and to efficiently manage waste.

ESG Challenges

The industry deals with environmental challenges, mainly with the mining of lead and copper. This process results in land degradation and deforestation. Moreover, lead is a toxic metal, and the mismanagement of end-of-life wastes and operational waste resulting from the manufacturing of these products end up in water streams, resulting in poisoning. Animals and local communities are prone to adverse health impact due to these unfair practices.

In terms of ‘social’ the ESG in the ammunition industry has a significant impact on human right violations. The industry thrives on the demand produced due to the global conflicts and terrorist activities due to the usage of its product. In this regard, companies in the ammunition industry have made ESG-centric policies which are similar in terms, which set up “high business ethics and values”, and “hold the human rights high”, creating a responsible product.

According to a report, most of the key leaders in the market, when questioned about the human right violations due to their products, most of them had no strong policies to govern and monitor their products in terms of human rights. In the said report, as many as 22 leading companies were asked about the said human rights violations, where only 4 of the said 22 had strong human rights policies and at least 13 companies had no policies that dealt with the human rights violations due to their products.

The acquisition of the products by the third parties from the manufacturers is generally regulated by the municipal laws that are framed based on the international conventions that deal with human rights and conflicts. However, certain states such as US and Russia have a few regulations that deal with the procurement and acquisition of the products and lack of human rights policies pertaining to the abuse and violation of human rights during conflicts make it worse and challenging i.e., to be precise, majority of the players lack policies that deal with the misuse of the products in the ammunition market by the third parties. Hence, governance in ESG remains a key challenging area or an area where a change in terms of ESG can be brought on.

Growth of the Ammunition Market:

In 2021, the ammunition market was valued around USD 22.35 billion and is forecasted to expand at CAGR i.e., compound annual growth rate of 3.2% from 2022 to 2030.  The presence of minimum policies that deal and govern the environmental aspects and social aspects of the ESG as well as the international treaties that guide the municipal laws that govern the market in terms of social aspect are the factors that shape the market investments in terms of ESG.

Key Companies in this theme:

Companies such as Northrop Grumman Corporation, FN Herstal, Olin Corporation, General Dynamics Corporation, and BAE systems are some of the top leading companies in the industry.

Scope of the Ammunition Industry ESG thematic Report:

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Ammunition Industry ESG thematic Report:

    • Offers a global perspective of the ammunition industry and the policies and measures taken by the players, for overcoming the challenges faced in terms of Environment, Social and Governance.

    • Key insights into the sustainability practices of major players in the market.