AGI wrote to its clients late last week to advise that its sustainable funds could now buy into companies that earned more than 10% of their revenue from military equipment and services.

Removal of a second exclusion means they can also now invest in nuclear weapons activities as long as they are within the Nuclear Non-Proliferation Treaty, which seeks to stop the spread of nuclear weapons-making capabilities.

The investor had recognized the restrictions were too “onerous,” said Matt Christensen, AGI’s global head of sustainable and impact investing, in an accompanying blog post published online.

“Nuclear weapons are a critical and credible deterrent to large-scale conflict and, in Western countries, the production of nuclear weapons is fully integrated into the industry and cannot be separated,” Christensen added.

AGI, part of insurer Allianz, manages about 570 billion euros ($615.77 billion) in assets.

The changes come amid a broader drive by European investors to reconsider their policies on investing in defense, under pressure from clients and some politicians to loosen restrictions.

Funds badged as sustainable have come under particular scrutiny, as they often have stricter exclusions. Few asset managers have actually changed their policies so far.

Defense stocks have soared in value this year as European countries, under pressure from U.S. President Donald Trump, have vowed to increase military expenditure, with Germany unveiling a massive ramp-up in defense and infrastructure spending.

AGI’s changes apply to funds classified as ‘Article 8’ under the European Union’s Sustainable Finance Disclosure Regulation, and would apply in most cases, the investor said in its letter to clients.

Article 8 is the broadest category for sustainable funds under the EU rules, while the higher Article 9 category refers more directly to sustainability.

AGI said several exclusions would still apply, including to companies that severely violated international rules and to manufacturers of chemical and biological weapons.

($1 = 0.9257 euros)

(Reporting by Iain Withers; editing by Tommy Reggiori Wilkes and Jan Harvey)