LONDON, March 25 (Reuters) - The European Investment

Bank's top-notch ESG score would need to be re-evaluated if it

bows to pressure and starts explicitly funding weapons and

ammunition, one of the world's leading ESG rating firms,

Morningstar Sustainalytics, said.

The European Commission and more than a dozen EU governments

have been increasing pressure on the bloc's lending arm in

recent weeks to end its near-total ban on weapons funding to

help strengthen Europe's defence industry.

New EIB President Nadia Calvino used one of her first public

statements last month to say it was engaging with key

stakeholders on what could been done under a "dual-use" policy

with which it already invests in drones and targeting systems.

Commission hawks though are now urging it to "adapt

defence-related exclusions" to support production of military

equipment, a move some officials, including the EIB's own former

head, worry could tarnish its ESG ratings and impact its

borrowing costs.

If the changes are too far reaching that could happen,

Sustainalytics' Lead ESG Banks Analyst, Amelia Peden, told

Reuters.

"We would have to re-evaluate (the EIBs rating) if they

bring in a new policy," Peden said. "Investing in weapons

definitely exhibits reputational risk, but of course it depends

what kind (of weapons)".

Those seen as the worst such as landmines won't be on the

EIB's list but other forms of ammunition might be after a number

of EU states were found to have limited supplies when asked to

send some to Ukraine.

Sustainalytics currently grades the EIB as having a

"negligible" ESG risk score - with a best-in-class 4.5 that is

one of top scores of any of near 16,000 banks, companies and

other entities it rates.

The bank has a balance sheet that runs to over a half

trillion euros which is bigger that the World Bank's and it

issues up to 65 billion euros ($70 billion) of debt a year.

Peden added that it would be the "exposure" perception part

of the EIB's score that could be most impacted although other

areas could be too.

"There's quite a range of things that (weapons funding)

could have an impact on and therefore their whole kind of

mission. So I think that's something that we will be looking

at."

($1 = 0.9229 euro)

(Reporting by Marc Jones; editing by Costas Pitas)