By Joyce Msuya
UNITED NATIONS, Oct 18 2023 – The humanitarian situation in and around the Gaza Strip—which continues to unfold as we speak—can only be described as an utter catastrophe.

In just 10 days since Hamas militants attacked Israel on 7 October, the death toll has already exceeded that of the 2014 hostilities, which lasted more than 7 weeks. So far, more than 2,800 Palestinians have been killed, more than 10,850 injured and hundreds are believed to be trapped under rubble.

Israeli authorities have also now confirmed that 1,300 Israelis have been killed and more than 4,100 injured. Nearly 200 remain captive. They must be treated humanely; hostages must be released immediately.

Humanitarians have not been spared. Fifteen UNRWA staff and five from the Red Cross and Red Crescent Movement have been killed. UN premises are among the vast number of civilian objects damaged.

As hostilities escalate, these numbers will only rise, and an already dire humanitarian situation will continue to deteriorate.

The United Nations, from the Secretary-General down, is deeply concerned about the situation. Even before the Government of Israel announced that Palestinians living in northern Gaza should leave for their safety, mass displacement had already taken place.

It is now estimated that as many as 1 million people have fled their homes to other parts of Gaza. In reality, civilians have nowhere to go—nowhere to escape the bombs and missiles, and nowhere to find water or food, or to escape the unfolding humanitarian catastrophe.

As civilians are packed into an ever-smaller area, the essentials they need to survive—shelter, water, food, power and medical care—have all but run out.

UNRWA schools shelter more than half of the displaced population in central-south Gaza. UNRWA is doing what it can to address the growing needs, but its capacity is at full stretch. Without more fuel, it will only be able to operate the small desalination plants in those shelters for a few more days.

Concerns about dehydration and waterborne diseases remain high given the collapse of water and sanitation services. Although Israel partially resumed the water supply to eastern Khan Younis over the weekend, other networks are so damaged that they could not deliver even if turned on again.

On Monday, UNRWA secured five trucks-worth of fuel to operate Gaza’s main seawater desalination plants, but this will only keep the facilities operational for a week or so.

Fuel reserves at Gaza’s hospitals have also been almost totally depleted. 20 out of 23 hospitals in Gaza were already only offering partial services. As generators and back-up generators run dry, critical life support systems will shut down and these hospitals—which are filled with the chronically ill and civilian casualties of war—will be thrust into darkness.

As every hour passes, the restoration of essential supplies and services, and the need to get humanitarian assistance into Gaza becomes ever more critical. The Emergency Relief Coordinator, Martin Griffiths, is joining a UN delegation to the region over the next few days in pursuit of these urgent objectives.

Humanitarian supplies are on standby. The UN and other humanitarian organisations have stocks of food, water, non-food items, medical supplies and fuel available in Egypt, Amman, the West Bank and Israel ready to be delivered now or within hours.

Emergency funding has also been made available. On 11 October, the ERC approved a rapid response allocation of $9 million from the Central Emergency Response Fund, bringing the total CERF funding for the OPT to $15 million.

The OPT Humanitarian Fund is also reprioritizing an existing allocation of $9 million to respond to the crisis, although this will deplete the humanitarian fund.

The UN will continue to engage with the parties and States with influence to identify urgent solutions to getting humanitarian access to Gaza so we can deliver these supplies; to secure humanitarian access throughout the territory; and to allow UN and NGO personnel in and out of the Strip.

A humanitarian suspension of hostilities would provide the space for this to happen, for civilians to move safely, and some respite from the bloodshed.

We will continue to demand respect for international humanitarian law. Civilians and civilian infrastructure must be protected and humanitarian relief must be facilitated, as international humanitarian law demands. We urge all countries with influence to insist on respect for the rules of war and the avoidance of any further escalation and spillover.

And we continue to call for humanity to prevail.

Footnote: This briefing on the humanitarian situation in the Gaza Strip took place before the devastating bombing of a hospital where more than 500 civilians were killed.

Joyce Msuya is Assistant Secretary-General for Humanitarian Affairs and Deputy Emergency Relief Coordinator.

IPS UN Bureau

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By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Oct 18 2023 – A senior manager of the world’s largest investment firm has ‘blown the whistle’ on ESG (environment, social and governance) ‘greenwashing’, especially on supposed climate finance.

Wall Street whistle-blower
Tariq Fancy was Chief Investment Officer (CIO) for Sustainable Investing at BlackRock, managing over $9 trillion in assets. Founded in 1988, headquartered in New York City, and with the world’s largest investment portfolio, BlackRock can move financial markets.

Jomo Kwame Sundaram

Hence, Fancy’s insider critique of corporate ESG pretensions – often associated with ‘responsible’ and ‘impact investing’ – has had a major impact. It has been seen as confirming and even elaborating on longstanding criticisms of ESG ‘greenwashing’.

Rejecting ‘stakeholder capitalism’, shareholder capitalism guru Milton Friedman long emphasized that a corporation’s primary and sole duty is to maximize profits for shareholders.

Managers are legally required to prioritize shareholder financial interests above all else. This means corporations must never sacrifice profits or their funds, however noble the cause.

Ethical or responsible actions can only be justified if they enhance ‘shareholder value’. Thus, companies can take morally desirable actions to improve their ESG ratings only if and when they enhance profitability.

As Friedman emphasized, corporate executives have strict fiduciary responsibilities under the law in ‘shareholder capitalism’ in the US, UK and elsewhere. Their managerial obligations and conduct thus limit potentially positive ESG impacts.

Prioritizing their corporate fiduciary duties above all else, they cannot enhance social or environmental benefits without maximizing returns for shareholders. By law, social, community or national ethical duties or moral values must always be secondary.

Is green financing progressive?
Corporate practices respond to changing understandings of profit-maximization in the medium to long-term. With changing national and international requirements, companies may be able to maximize long-term financial gains by investing in sustainability.

Thus, investing in green transitions – e.g., renewable energy or re-afforestation – can become profitable in the longer-term if the regulatory environment changes soon enough to sufficiently change incentives for long-term investments.

So, long-term profitability can be enhanced at the expense of short-term gains if conducive regulations, incentives and deterrents are introduced early enough.

Companies changing to more environmentally sustainable practices – like adopting solar panels, investing in re-afforestation, or other green initiatives – may thus become more profitable over the longer-term.

But ‘business-as-usual’ investments are still likely to yield more short-term gains in the near-term. And stock markets are more interested in short-term corporate performance, undermining longer-term profitability considerations. Thus, short-termist corporate governance norms deter green transitions.

Do green bonds accelerate green transitions?
Larry Lohmann has shown how difficult it is to confirm that finance raised by companies issuing ‘green bonds’ is actually additional. It is often difficult to verify such bonds are funding new projects that would not have happened anyway.

Sometimes, companies had already planned to make certain investments using conventional financing. With ready access to such finance, they would not have issued green bonds if not for the pecuniary advantages of doing so.

In such circumstances, green bonds have the same results as conventional finance if not for the incentives to claim otherwise. Hence, green bonds cannot claim credit for green investments and transitions if they would have happened anyway by other means.

This raises larger questions about the supposedly transformative impact of green bonds. Companies may even obscure environmentally unsustainable or even harmful practices by bundling them together with ostensibly ‘green’ investments.

Thus, green bonds may finance certain genuinely sustainable or environment-friendly projects without changing the rest of their investment portfolios and business practices.

Stock market discipline?
Despite lacking strong supportive empirical evidence, advocates claim ESG-compliant stocks outperform non-compliant ones in the share market. Similarly, they claim such compliance improves overall ESG indicators and contributes significantly to achieving the Sustainable Development Goals.

But there is no strong evidence that ESG-inspired stock market or corporate strategies have improved the environment, society or governance. After all, shareholders and companies prioritize short-term financial goals over longer-term considerations, including ESG and long-term profitability.

Divestment of shares in companies which are not ESG-compliant may only have limited impact if others buy non-compliant stocks, especially after their prices have fallen.

Also, even if some investors sell their shares in companies which are not ESG-compliant, it is unlikely the stock market will ‘green’ corporate behaviour more broadly.

Such stocks are mere drops in the ocean of wealth and finance, and one cannot realistically expect the tail to ‘wag the dog’. In 2021, the world economy had $360 trillion worth of wealth, with nearly $6 trillion in private equity.

Disciplining companies
Divestment means selling shares and thus losing ‘voice’ in company governance. But for shareholder engagement, it is necessary to retain stock ownership. Holding stock gives shareholders voice which can be used to try to pressure companies to be more ESG-compliant.

Without financially damaging effects for its reputation and share price, a company would not be compelled to become more ESG-compliant. Only significant stock price collapses – following massive share divestment due to reputational damage – are likely to motivate companies to become ESG compliant.

Undoubtedly, adverse publicity for particular companies hurts their stock prices, at least temporarily. And this may force companies to improve their behaviour. But such success implies a ‘name and shame’ approach – not ESG-compliance – can be effective.

And while some share prices may be more sensitive to adverse ESG publicity in some societies, there is no strong evidence this is true everywhere. Nor is there any strong evidence that systematic ESG reporting has generated desirable outcomes in most societies.

Divestment may not strongly affect company profitability or share prices. But actions such as consumer boycotts directly influence company revenue and financial performance. This may prompt strong corporate responses due to their impacts on companies’ ‘bottom lines’.

IPS UN Bureau

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