Defence Stocks Hit Record Highs in 2026 — Here's Their Ethical Breakdown
Defence stocks score badly on peace. That is not news. What is worth examining is everything else.
RTX incurred over $1.145 billion in ethics-related fines in a single year -- for bribery, fraud, and sharing classified data with China, not for weapons manufacturing. Boeing's workforce went on a seven-week strike over compensation, not over what the company builds. Northrop Grumman contaminated a community's drinking water for over 60 years.
We scored six major defence contractors across 11 ethical dimensions using court records, regulatory penalties, and investigative reporting. The weapons scores are predictably negative. The surprises lie in the dimensions investors rarely consider.
Are Defence Stocks Unethical? What 6 Companies Show
| Company | No War, No Weapons | Honest & Fair Business | Planet-Friendly Business | Fair Pay & Worker Respect | Safe & Smart Tech |
|---|---|---|---|---|---|
| Northrop Grumman | -90 | 0 | -50 | 0 | -60 |
| Rheinmetall | -80 | 0 | -50 | +20 | -20 |
| Lockheed Martin | -70 | -20 | 0 | -30 | +10 |
| RTX | -60 | -40 | -20 | +10 | -10 |
| Boeing | -60 | -40 | -40 | 0 | 0 |
| General Dynamics | -60 | -20 | 0 | 0 | -20 |
Scores range from -100 (worst) to +100 (best). Bold indicates notably low scores.
Every company scores negative on No War, No Weapons. That is expected. What the data also reveals: governance penalties measured in billions, environmental contamination spanning decades, and sharp contrasts in how defence contractors treat their workers. For context on how these scores compare against the broader market, see our S&P 500 ethical scores analysis.
RTX: $1.145 Billion in Governance Fines in a Single Year
RTX scores -40 on Honest & Fair Business, with a 2024 regulatory record that includes:
- A $252 million criminal penalty and a $52.5 million civil penalty for bribing a Qatari official
- $146.7 million in criminal penalties and a $428 million civil settlement for defrauding the Pentagon by overcharging on Patriot missile systems
- A $200 million fine for providing classified military aircraft data to China
RTX derives 71% of its revenue from defence contracts. On No War, No Weapons (-60), it sits alongside Boeing and General Dynamics.
Surprise Finding: RTX scores +10 on Fair Pay & Worker Respect -- one of only two companies in this analysis to score positive on any non-governance dimension. The billion-dollar governance failures exist alongside a worker treatment record that outperforms most of its peers.
View RTX's full score breakdown
Northrop Grumman: The Lowest Weapons Score, the Cleanest Governance Record
Northrop Grumman scores -90 on No War, No Weapons -- the lowest weapons-related score of any company in this analysis. The company derives over 50% of its revenue from direct arms contracts, with expected annual sales of up to $41.4 billion in FY 2024. It collaborates on classified U.S. spy satellite projects and was fined $15 million for 110 violations of the Arms Export Control Act, including unauthorised transfers of guidance system source code to Russia.
On Safe & Smart Tech (-60), Northrop Grumman developed the HART biometric surveillance database -- capable of storing information on over 500 million individuals -- which has drawn concerns about tracking without consent and racial profiling.
The environmental record: Northrop Grumman's operations at its Bethpage facility contaminated residential soil and groundwater with toxic chemicals over more than 60 years, polluting the sole drinking water source for a densely populated region with carcinogens. The company has been accused of knowing about the contamination since the mid-1970s. In 2024, "alarming" levels of hexavalent chromium were detected in soil samples at Bethpage Community Park.
Surprise Finding: Northrop Grumman scores 0 on Honest & Fair Business -- no ethics-related regulatory fines within the past three years, despite the lowest weapons score in the group. It maintains a 24/7 anonymous whistleblower reporting system. The company with the worst record on weapons has the cleanest governance record among its peers.
View Northrop Grumman's full score breakdown
Boeing: Where Workers Struck to Close the Pay Gap
Boeing scores -40 on Honest & Fair Business. The company has incurred $739.1 million in ethics-related regulatory fines, including a $243.6 million fraud charge related to the 737 MAX crashes and $444.5 million paid into a victims' fund. An FAA report found employees feared retaliation when raising safety concerns. Between 2020 and 2024, 32 retaliation complaints were filed. A whistleblower was found dead amid legal proceedings against the company.
On Fair Pay & Worker Respect (0), Boeing's score reflects a workforce that fought back. Over 33,000 machinists walked out for seven weeks in late 2024 after rejecting a 25% pay increase. The new contract included a 43.65% compounded wage increase over four years -- a result driven by collective action, not corporate generosity.
Boeing also scores -40 on Planet-Friendly Business and -40 on Zero Waste & Sustainable Products.
Surprise Finding: Boeing scores 0 on Safe & Smart Tech -- a neutral result that places it above Northrop Grumman (-60) and Rheinmetall (-20) on data and technology governance. For a company with severe governance and safety failures, its technology practices register differently.
View Boeing's full score breakdown
Rheinmetall: The Best Worker Score in Defence
Rheinmetall scores -80 on No War, No Weapons. Defence accounted for 80% of group sales in 2024, increasing 50% year over year. The company is actively divesting civil businesses and considering idle plant conversion for tank production. Its subsidiary RDM continued exports to Saudi Arabia between 2018 and 2021 despite a German government prohibition. Mortars with characteristics of Rheinmetall's 120-mm ammunition were used in a 2018 attack in Hodeidah, Yemen.
On Planet-Friendly Business (-50), Rheinmetall reported total emissions of 6.1 million tCO2e in 2024. Only 21.7% of its energy comes from renewable sources.
Safety is a concern: the Lost Time Incident Rate rose to 6.8 in 2024, up from 5.8 the year before. A blast at a facility in Spain in January 2025 hospitalised six workers -- the second major explosion in two years.
Surprise Finding: Rheinmetall scores +20 on Fair Pay & Worker Respect -- the highest worker score among defence contractors in our database, and the highest positive score on any dimension in this analysis. A company making tanks and ammunition treats its workers better, by our measures, than most of its peers.
View Rheinmetall's full score breakdown
Where Defence Companies Score Better Than Expected
Lockheed Martin scores -70 on No War, No Weapons, with 73% of 2023 net sales derived from U.S. government contracts. China has repeatedly sanctioned the company over U.S. arms sales to Taiwan. In February 2025, it agreed to pay $29.74 million to settle allegations of failing to provide accurate pricing data on F-35 contracts.
On Fair Pay & Worker Respect (-30), Lockheed Martin's record includes seven substantiated labour violations and a CEO-to-median-employee pay ratio of 189:1.
Surprise Finding: Lockheed Martin scores +10 on Safe & Smart Tech -- positive on data and technology governance despite its deep military entanglement. The weapons dimension and the technology governance dimension measure different things.
General Dynamics scores -60 on No War, No Weapons, with 48.92% of revenue from military contracts. Its subsidiary NASSCO was found to have underpaid 36 Mexican workers on temporary visas, paying them in Mexican pesos below the federal minimum wage. A Department of Labor investigation recovered over $1.4 million in back wages and damages.
View Lockheed Martin's full score breakdown | View General Dynamics' full score breakdown
The Worker Treatment Gap in Defence
The widest gap in this analysis is not between weapons scores. It is between how defence contractors treat their employees.
Rheinmetall (+20) and RTX (+10) score positively on worker respect. Lockheed Martin (-30) and Boeing (0, driven by a major strike) sit at the other end. The spread of 50 points on a single dimension -- within a group of companies that do essentially the same thing -- suggests that weapons manufacturing does not determine how a company treats its workforce.
For investors who exclude defence on principle, the scores confirm one basis for exclusion. For investors who hold defence stocks and want to understand the broader integrity picture, the data reveals that governance failures, environmental contamination, and labour disputes extend well beyond what the weapons dimension captures.
The militarisation of AI adds another layer -- for a parallel analysis, see our breakdown of AI stocks' ethics scores.
What Defence Sector Scores Mean for Portfolio Decisions
Defence stocks are delivering strong returns as NATO and EU spending surges. The integrity data covers different questions: regulatory penalties measured in billions, weapons traced to conflict zones, environmental contamination spanning decades, workers striking over compensation.
Mashinii scores are built on independently documented evidence from courts, regulators, journalists, and NGOs. Every score for every company profiled here is available for free on Mashinii, with full source citations across all 11 dimensions.
For advisors managing client portfolios with defence exposure, Mashinii's evidence-based scores can support suitability conversations and disclosure obligations. Discover how Mashinii helps financial advisors.
How We Score
Mashinii scores companies on 11 ethical dimensions using public records and documented evidence. Every score is backed by cited sources. No corporate self-reporting is used.
Learn more about our methodology
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Mashinii provides integrity data for informational purposes. This is not financial advice.