On April 2nd, General Electric completed the spin off of its energy business, which has now began trading under the name GE Vernova. In January 2023, the company also spun off its healthcare division. The long-awaited split has now formed three separate public companies: GE Aerospace, GE Vernova and GE Healthcare.
GE Aerospace has been launched as “a world-leading provider of jet and turboprop engines, as well as integrated systems for commercial, military, business, and general aviation aircraft”. The company’s military products include engines and other components as well as maintenance services for combat aircraft, transport aircraft, helicopters, unmanned aircraft and warships. Before the spin offs, General Electric’s revenue derived from its military business accounted for six percent of its total sales according to SIPRI data. With GE Aerospace now being a standalone company, however, its percentage of revenue earned from arms sales is likely to become much more significant. This may have implications for shareholders that seek to limit their exposure to the defense industry by applying a maximum threshold to companies’ revenue generated from military sales.
More concerning, however, is General Electric’s involvement in arms deals with repressive regimes and other high-risk countries, including Saudi Arabia, Israel and Egypt. There is a high risk that weapons supplied to such countries will be used to commit or facilitate serious human rights violations and violations of IHL. In line with human rights standards for businesses and international treaties like the Arms Trade Treaty, financial institutions should strongly restrict any financial exposure to companies supplying weapons to high-risk countries.