Defense stocks make a lot of portfolios nervous, and Catholic investors have a specific framework for thinking about them. It's not pacifism. The Catholic Church has never taught that military force is always wrong, and the Catechism explicitly defends the right to lawful national defense. But the Church does teach that certain weapons are categorically forbidden, and that distinction matters for how Catholic investors approach the defense sector.

Lockheed Martin (LMT), Raytheon (now part of RTX Corporation), Northrop Grumman (NOC), General Dynamics (GD), and BAE Systems (BAESY) all appear on Catholic exclusion lists, but not all for the same reasons. Let's work through the logic.

The just war framework

Catholic moral theology on war is laid out in the Catechism paragraphs 2307 through 2317. The core teaching: nations have a right to defend themselves against aggression, but the use of force must meet specific conditions to be morally legitimate.

The conditions for just war include:
- Grave and certain damage inflicted by the aggressor
- All other means of ending the aggression must have been shown to be impractical or ineffective
- Serious prospects of success
- The use of arms must not produce evils and disorders graver than the evil to be eliminated

Even within a just war, the means employed must respect civilian populations, prisoners, and wounded soldiers. The Catechism paragraph 2314 states explicitly: "Every act of war directed to the indiscriminate destruction of whole cities or vast areas with their inhabitants is a crime against God and man, which merits firm and unequivocal condemnation."

This is where the moral theology gets concrete for investors. Weapons that cannot be used without indiscriminate destruction of civilians are categorically forbidden, not just restricted. Producing such weapons is cooperation with an intrinsically evil act.

The three categories of weapon exclusion

The USCCB Socially Responsible Investment Guidelines divide weapons production into three moral categories:

Weapons of mass destruction. Nuclear, chemical, and biological weapons are categorically forbidden. Any meaningful corporate involvement triggers exclusion. This category gets a near-zero tolerance threshold because the weapons themselves are intrinsically evil.

Anti-personnel weapons that cause disproportionate civilian harm. Landmines and cluster munitions fall here. Both have been banned by international treaties (the Ottawa Treaty on landmines, 1997, and the Convention on Cluster Munitions, 2008), and the Church supports these bans. Catholic investors exclude companies involved in producing them.

Conventional weapons with legitimate defense applications. This includes aircraft, ships, armor, and ordinary military equipment. These aren't categorically forbidden, but Catholic investors should engage with producers to push for responsible export controls, civilian protection, and ethical practices.

The distinction matters because applying a flat exclusion to all defense companies would contradict just war theory, which acknowledges the legitimate role of national defense.

Lockheed Martin specifically

Lockheed Martin is the largest defense contractor in the United States, with 2025 revenue over $70 billion. The company produces the F-35 Lightning II fighter, the C-130 transport aircraft, Aegis combat systems, and many conventional defense products.

Why does Lockheed get excluded in most Catholic screens? Because it also produces components for nuclear weapons systems. Specifically, Lockheed produces Trident II D5 submarine-launched ballistic missiles, which are nuclear-tipped weapons deployed on U.S. and British submarines. Lockheed has had this contract since the 1980s and it remains an ongoing business line.

Nuclear weapons are categorically forbidden under Catholic teaching. Pope Francis made this explicit in November 2017 when he stated that "the threat of their use, as well as their very possession, is to be firmly condemned." This was a significant development from earlier Catholic teaching, which had allowed nuclear deterrence as a temporary stopgap during the Cold War. The Church's position now is that nuclear weapons are morally impermissible to produce, possess, or threaten to use.

So Lockheed gets excluded on the WMD category. Even though most of Lockheed's business is conventional weapons and non-military products (the company has significant civilian aerospace and technology operations), the nuclear connection crosses the moral line.

RTX Corporation (formerly Raytheon)

Raytheon merged with United Technologies in 2020 to form RTX Corporation. The combined company is roughly comparable in size to Lockheed and has similar exposures.

Raytheon's nuclear connections come through several programs. The company produces components for the W80 and W88 nuclear warheads, and it's been involved in nuclear weapon delivery systems. RTX also produces Tomahawk cruise missiles, which have non-nuclear variants but can be configured for nuclear delivery.

Beyond the WMD category, RTX has other concerns. The company produces cluster munitions through some of its product lines, though it has reduced this exposure over time. The production of cluster munitions is incompatible with the Convention on Cluster Munitions, which the Catholic Church supports.

RTX is therefore excluded in most Catholic fund screens for multiple reasons: nuclear weapons, cluster munitions, and the general moral concerns about weapons proliferation.

Northrop Grumman

Northrop Grumman (NOC) is the third major U.S. defense contractor in this category. Its nuclear connections are significant: the company is developing the B-21 Raider stealth bomber, which is designed for both conventional and nuclear payloads. Northrop also works on intercontinental ballistic missile modernization.

The B-21 is particularly relevant because it's a new nuclear delivery system, not just maintenance of existing Cold War capabilities. Catholic teaching has specifically addressed modernization of nuclear arsenals as morally problematic. Pope Francis has repeatedly criticized nuclear modernization programs as diverting resources from human development.

Northrop is excluded in most Catholic screens for these reasons.

General Dynamics

General Dynamics (GD) has a more complex profile. The company produces submarines (Virginia and Columbia class), combat vehicles (Abrams tanks, Stryker), and various defense systems. Its nuclear connections come primarily through the Columbia class submarine program, which will carry Trident II missiles.

Some Catholic fund managers exclude GD while others treat it more leniently because its nuclear exposure is more indirect. The submarines themselves are platforms, not weapons. The missiles and warheads come from other contractors. Whether this changes the moral analysis is a matter of prudential judgment.

GD also produces small arms through its subsidiary businesses, which can raise separate concerns about civilian weapon proliferation even when the core military business is legitimate.

The European defense contractors

Catholic investors should know about European defense exposures as well. BAE Systems (BAESY), Airbus (EADSY), Thales Group (THLLY), and Leonardo (FINMY, formerly Finmeccanica) all have varying defense exposures, and some have nuclear connections through European deterrent programs.

BAE Systems has significant involvement in the UK's Trident nuclear deterrent and is excluded in most Catholic screens for this reason. Airbus has military helicopter and transport aircraft business but less direct nuclear exposure. Thales has various defense electronics. Leonardo has conventional defense but limited nuclear involvement.

The European context also involves different treaty regimes. European Union countries and most European defense contractors comply with the Ottawa Treaty on landmines and the Convention on Cluster Munitions, which means their exclusion exposure on those specific categories is lower than for U.S. companies that have been more resistant to the treaties.

Landmines and cluster munitions specifically

Anti-personnel landmines and cluster munitions deserve their own attention because they're especially important to Catholic moral teaching. These weapons cause harm long after conflicts end, disproportionately affecting civilians (especially children), and violate the principle of proportionality in just war theory.

Companies that have historically produced these weapons include Textron (TXT), which discontinued cluster munition production in 2016, and various smaller international manufacturers. Most major U.S. contractors have now exited these businesses due to treaty pressure and moral concerns.

Catholic investors should still verify current exposure because corporate portfolios change. A company that exited cluster munitions five years ago might have reentered, or a merger might have added exposure.

The engagement alternative

Some Catholic investors argue that engagement rather than exclusion is the right approach for defense contractors. The logic: the defense industry isn't going away, nations will continue to need legitimate defense, and Catholic shareholders can push for ethical practices and export controls.

This has merit for conventional defense. Engagement with Lockheed on export controls, civilian protection, and responsible sales practices could produce good outcomes. But for nuclear weapons specifically, engagement has limited prospects. You can't persuade Lockheed to exit the Trident program; it's a core government contract.

For WMD-related exposure, divestment is the practical approach. For conventional defense, engagement has more promise. This is a place where Catholic investors can split: some exclude all defense, some exclude only the WMD producers, some own conventional defense while pushing for reform.

Clean alternatives for aerospace exposure

If you want aerospace and technology exposure without the defense moral issues, consider:

Boeing (BA) has significant civilian aerospace alongside its defense business. The civilian side dominates the top line, though Boeing does have defense exposure that some Catholic investors exclude.

Honeywell International (HON) has aerospace components and industrial exposure.

TransDigm Group (TDG) makes aircraft components with some civilian focus.

Textron (TXT) has civilian aerospace (Cessna) alongside military business.

Embraer (ERJ) is a Brazilian aerospace company with significant civilian aviation exposure.

These aren't perfect substitutes, but they provide aerospace and technology exposure without the most severe moral conflicts.

The deeper question

The weapons exclusion raises the deeper question of what kind of world Catholic investors want to help build. Centesimus Annus paragraph 36 talks about investment as a moral and cultural choice. Owning defense stocks is participating in the defense economy, which can be legitimate under just war theory but carries responsibilities.

Pope Francis has been particularly pointed about the arms industry. In his 2016 address to the United States Congress, he called the global arms trade "shameful and culpable" and said that Christians have an obligation to "put an end to the arms trade." That's a strong position, even if the Church's formal teaching allows for legitimate national defense.

The USCCB guidelines try to balance these concerns. Legitimate defense is permitted. Intrinsically evil weapons are forbidden. Engagement with defense companies on ethical practices is encouraged. The result is a framework that lets Catholic investors participate in the economy without compromising on the most severe moral issues.

Excluding Lockheed and RTX isn't about naïveté on national security. It's about recognizing that some weapons cross moral lines the Church can't endorse. Your portfolio can reflect that line, or it can pretend it doesn't exist. The USCCB guidelines choose reflection.

Weapons of Mass Destruction: Why Lockheed and Raytheon Get Excluded