Last year defence contractors warned that ESG would cause their shares to be shunned

Babcock’s aircraft carrier at the Rosyth shipyard

Last year the Financial Times reported that defence contractors were becoming increasingly concerned that the ‘sweeping trend’ for ethical investment (ESG) would lead to their shares being shunned by institutional investors.

David Lockwood (left), CEO of Babcock International – Britain’s second-biggest defence contractor – warned the Financial Times that anti-defence lobbyists are trying to hijack the ethical investment agenda for their own aims

Lockwood’s comments echoed those of Rupert Soames, chief executive of UK outsourcer Serco, who recently warned of “unintended consequences” from the rise in ESG standards that could force some public companies to go private.

Sir Roger Carr, chair of BAE Systems, Britain’s biggest defence group, spoke recently of the risk of some sectors being “blackballed.

The Norwegian investment fund KLP sold out of Rolls-Royce, the FTSE 100 aerospace company, because Rolls-Royce makes the nuclear reactors that power the Royal Navy’s Trident-missile submarines.

Canbriam, a New York based a global multi-specialist asset manager, ‘a recognized pioneer and leader in sustainable investment’ explains:

For many years, and with the gradual rise of ESG investing, investors have been excluding the defence sector from their investments due to the adverse nature of armaments which have often served to infringe human rights and led to devastating effects on human lives and the overall well-being of society . . . we have a fiduciary responsibility to invest on behalf of our clients in the most sustainable manner. Our clients trust us for our convictions and our ability to invest in a truly sustainable fashion, without wavering from the principles of sustainability due to global political events.

Its heading is uncompromising:

However, as investors bet on the promises of increased military spending by western governments to help Ukraine’s war effort against Russia, in recent months shares in defence companies have surged, rallylng 30% since October and eclipsing gains for wider stock markets (Financial Times).

And since US president Joe Biden underlined his support for Ukraine in February with a surprise visit to Kyiv, defence contractors have been waiting for governments to follow through and place new orders.

 

 

 

 

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March 2023 Update – Global Campaign on Military Spending UK

Our analysis of Jeremy Hunt’s Spring Statement shows the following: £7.1bn (or 15.7%) increase in UK core military spending this financial year (from £45.9bn in 2021/22 to £53.1bn in 2022/23)

The uplift granted to the military was higher than that for any other Government department (including health, education or climate).

In total the budget allocated a total of £13.1bn of additional public money to the military. In the runup to the budget announcement, Global Campaign on Military Spending (GCOMS)  laid out its stall with “Eight reasons the UK shouldn’t increase military spending”

Global Days of Action on Military Spending (GDAMS) 2023 13th April – 9th May

This year of war in Ukraine has meant a huge boost for militarism and military budgets across the world, especially in countries of the Global North. But GCOMS believes that the response should be quite the opposite: military spending should be drastically reduced, investing in common & human security instead…

The 12th edition of the GDAMS (coordinated by the International Peace Bureau) will take place from April 13 to May 9, 2023. Will your group be protesting military budgets & warmongering, and taking action for peace & justice?

If so, get in touch with your plans, GCOMS can provide help with promotion, banners and other campaign materials. It also has a small budget so don’t let costs be a barrier to action!

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The full GCOMS UK Budget Briefing may be read here: https://demilitarize.org.uk/military-spending-boosted-more-than-health-education-environment-or-overseas-aid/

 

 

 

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Global arms sales soar for the seventh consecutive year

Rising arms sales  benefit the global security elite: Feinstein  

Despite all the protests against the manufacture and export of lethal weapons to oppressive regimes and the good news about Elbit systems in the last post, global arms sales have risen for the seventh consecutive year, according to new figures published this week.

Download the fact sheet here

A report by the Stockholm International Peace Research Institute (SIPRI) said that sales of weapons and associated services by the world’s 100 biggest military supplies companies rose by 1.9% to a staggering $592 billion (£484bn) in 2021, despite problems with the shipping of some components.

The Middle East’s growth in arms sales outstripped anywhere else in the world. SIPRI said that five Middle Eastern companies reported a 6.5 per cent surge in sales to $15bn (£12bn).

Israel’s Elbit Systems’ sales rose from $4.2bn (£3.4bn) in 2020 to $4.75bn (£3.8bn), The other companies were IAI, Rafael and Turkey’s ASELSAN and Turkish Aerospace.

Lucie Beraud-Sudreau, director of SIPRI’s military expenditure and arms production programme, said: “We might have expected even greater growth in arms sales in 2021 without persistent supply chain issues. Both larger and smaller arms companies said that their sales had been affected during the year. Some companies, such as Airbus and General Dynamics, also reported labour shortages.”

According to the institute, 40 US companies made sales totalling $299bn (£244bn) in 2021. Five US companies headed the list of top-selling arms manufacturers: Lockhead Martin, Raytheon Technologies, Boeing, Northrop Grumman and General Dynamics.

Andrew Feinstein, author of The Shadow World: Inside The Global Arms Trade, told a Morning Star journalist:

“This rise in arms sales, along with an increase in general defence spending to over $2 trillion (£1.6trn) in the past year, materially benefits the politicians, corporate executives, military and intelligence leaders and assorted intermediaries who constitute the global national security elite, while making the world a less safe place.

 

 

 

 

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Should the arms manufacturing sector fare better than health, education and social care?

 

As the global economy has contracted by more than 3% as forecasted, the sales of arms and military services increased by 1.3% in real terms, compared with 2019.

Ceren Sagir draws attention to the sales of the top 100 weapons companies in 2020 which were 17% higher last year than in 2015, according to the latest data from the Stockholm International Peace Research Institute (Sipri).

Despite the need for pandemic-related health staffing, schools’ ventilation, the support needed by lockdown affected businesses and carbon-reducing measures, 2020 was the sixth consecutive year of growth in arms sales to governments.

SIPRI researcher Alexandra Marksteiner said: “The industry giants were largely shielded by sustained government demand for military goods and services.

“In much of the world, military spending grew and some governments even accelerated payments to the arms industry in order to mitigate the impact of the Covid-19 crisis.”

The top five arms firms were all from the United States, with Lockheed-Martin, which counts F-35 fighter jets and various types of missiles among its bestsellers.

Chinese firms accounted for the second-largest share and Britain was in third place, with arms sales up by 6.2% compared with 2019, BAE Systems being the highest-placed European firm.

The arms sales of the three Israeli companies listed in the top 100 reached $10.4bn (£76bn), 2% of the total.

Of the top-producing countries, only France and Russia saw their firms’ sales decline last year.

Sipri said that the firms had benefited from the broad injection of government cash into economies, as well as specific measures designed to help arms companies, such as accelerated payments or order schedules.

 

 

 

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Why has Israeli arms giant Elbit Systems lost two contracts?

An answer to a written parliamentary question submitted by shadow defence secretary John Healey (left) last month, revealed that Elbit sites in Oldham and London have closed down .

It has also lost two lucrative contracts with the Ministry of Defence; defence minister Alex Chalk confirmed that Elbit is no longer working on the Royal Navy’s Dreadnought crew training programme just seven months after it was selected to deliver the £160 million contract. The government is also negotiating Elbit’s departure from the  £123m Project Selborne contract, which was meant to run for 12 years.

Global arms expert Andrew Feinstein commented: “The loss of these contracts is a major crisis for Elbit and raises questions about the future of the controversial company in Britain. The government claims that it has happened as part of a ‘sovereignty’ drive, but the reality is that many other foreign defence companies continue to play vital roles as suppliers of equipment and services to the UK’s armed forces”.

Palestine Action Scotland Photo: Guy Smallman

For two years Palestine Action has campaigned against Israeli arms giant Elbit Systems which supplies weapons to the Israeli military. Andrew Feinstein added: “I strongly suspect that they have lost these contracts as a consequence of the direct action group Palestine Action having so successfully revealed the brutal reality of Elbit’s gross human rights abuses, especially in enforcing the illegal occupation of Palestine by Israel.”

There was no comment on the Elbit website, which only reported that in November the company was awarded a smaller and far less contentious contract valued at approximately £17 million to supply Night Vision Goggles and through-life support to the British Army.

 

 

 

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Professor Garcia: governments should prioritize the common good over military spending

Denise Garcia (Northeastern University, Boston, Mass) is an academic who advises the United Nations on arms control and the military uses of artificial intelligence  and robotics. Highlights from her article, Redirect military budgets to tackle climate change and pandemics follow.

She opens: “The old world order, in which governments build arsenals to protect the state, is clearly not delivering what people need. According to the Global Peace Index, levels of peace have fallen by 2.5% since 2008. The index measures 23 indicators — including military expenditure and ease of access to small weapons — in 163 independent states and territories, ranking them according to their level of peacefulness. The drop in peace levels is despite an increase in military spending globally, to a record US$1.9 trillion in 2019”.

Despite threats to human existence from climate change, biodiversity loss and a pandemic that’s devastating economies and paralysing societies, countries still spend recklessly on destructive weapons for wars they will never fight.

Some nations, including Iceland and Costa Rica, don’t have armies. This year, Costa Rica became one of the first countries to have stopped and then reversed deforestation, with a goal of becoming carbon neutral; it is also one of the first to adopt a tropical carbon tax.

To recover from the costs of the pandemic, estimated at up to $82 trillion over the next 5 years (see go.nature.com/2q5jtyf), governments should focus their spending on stimulus packages for decarbonization, health, education and the environment.

The arms trade is lucrative: sales by the world’s leading arms-producing companies reached $420 billion in 2018. Everything from small arms, tanks and aircraft to military goods and services are sold in legal and illegal markets. They end up on the streets and in the hands of militant organizations such as Al-Qaeda. The result? In 2017 (the latest year for which data are available), some 464,000 people died in 2017 through homicides, and 89,000 individuals died in armed conflicts globally.

The five countries with the largest defence budgets, unprepared for Covid, were hit hard

The United States, China, India, Russia and Saudi Arabia together accounted for almost two-thirds (62%) of global military expenditure in 2019, and US, Indian and Russian rates of infection are some of the highest so far, with the United States topping both lists. Their arms were no defence against Covid.  Germany and New Zealand spend around 1% of GDP and have so far fared much better in the pandemic.

By 2050, almost 100 million people could be forced to migrate from coastal areas and other places that will become uninhabitable as a result of climate change (see go.nature.com/3agzsij).

In 2019, fires in the Amazon rainforest raged towards the ‘point of no return’ at which the whole forest ecosystem could collapse. The Amazon is the largest reservoir of biodiversity on Earth; in economic and social terms, from food to jobs, homes and health, its loss has been put at about $3.6 trillion. Biodiversity loss also exposes people to new viruses.

The real enemy is upon us. The frequency of heatwaves, droughts, forest fires, floods and hurricanes has quadrupled over the past four decades, and is rising.  All of these call for approaches to national defence that are genuinely centred around human security.

Professor Garcia has long argued that nations should prioritize ‘human security for the common good’ over military spending, ensuring people can live to their full potential – and that governments need to accept that their concept of national security sustained by a military–industrial complex is anachronistic and irrelevant.

 

 

 

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The real enemies are upon us: big armies will hinder, not help: Denise Garcia

Ben Chacko describes Britain’s arms manufacturers exports, especially to war zones, as ‘the gift that keeps on giving’.

An elderly Ukrainian woman looks on after Russian shelling in Mykolaiv, Ukraine, Wednesday, June 29, 2022

The top 100 arms companies continue to grow amid the pandemic

Sales of arms and military services by the industry’s 100 largest companies totalled $531 billion in 2020—an increase of 1.3% in real terms compared with the previous year, according to new data released by the Stockholm International Peace Research Institute (SIPRI).

The arms sales of the top 100 arms companies in 2020 were 17% higher than in 2015—the first year for which SIPRI included data on Chinese firms. This marked the sixth consecutive year of growth in arms sales by the Top 100.

The Campaign Against the Arms Trade estimates that the real value of arms to Saudi Arabia is over £23bn, while the value of sales to Britain’s despotic allies is nearly £25bn.

To give a sense of scale, Chacko adds, £1bn is about the amount of money spent on agency and locum doctors in the NHS.

Jeremy Corbyn’s Chatham House speech was published in The Spectator (2017)

It stated that – if elected in 2019 – Labour would have re-examined the arms export licensing regulations to ensure that all British arms exports are consistent with Britain’s legal and moral obligations.

Export licences for arms when there is a clear risk that they will be used to commit serious violations of international humanitarian law would not have been granted.

Weapons supplied to Saudi Arabia, when the evidence of grave breaches of humanitarian law in Yemen is overwhelming, would have been immediately halted.

Vested interests then combined to ensure that profit-threatening Corbyn (still regularly cited by Boris Johnson) was not elected

Professor Denise Garcia (right), an academic who advises the United Nations on arms control and the military uses of artificial intelligence (AI) and robotics, wrote in Nature (August 2020):

“The real enemy is upon us. The frequency of heatwaves, droughts, forest fires, floods and hurricanes has quadrupled over the past four decades, and is rising. By 2050, almost 100 million people could be forced to migrate from coastal areas and other places that will become uninhabitable as a result of climate change (see go.nature.com/3agzsij). . .

“Big armies haven’t helped countries to fight COVID-19 — precisely the opposite. The five countries with the largest defence budgets were unprepared and were hit hard. The United States, China, India, Russia and Saudi Arabia together accounted for almost two-thirds (62%) of global military expenditure in 2019, and US, Indian and Russian rates of infection are some of the highest so far, with the United States topping both lists”.

Is the tide turning in the United States, offering a major correction to escalating militarism and an atrophying welfare state?

In the Jacobin, Stephen Semler reports that Representatives Barbara Lee (D-CA) and Mark Pocan (D-WI) — co-chairs of the Defense Spending Reduction Caucus — introduced legislation to draw down US military spending which has been referred to the Committee on Armed Services. The People Over Pentagon Act would cut the Department of Defense budget by $100 billion and reinvest the money in nonmilitary federal programs – a first step in funding human needs rather than padding the bottom lines of weapons contractors.

Professor Garcia: “Britain should end foreign military adventures forthwith and address its social, economic and environmental challenges. The real enemy is upon us – redirect military budgets to tackle climate change and pandemics”.

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Medical research adds reports of Gazans living with injuries from explosives – some delivered by air – to the ‘defence’ toll

Sarah Wilkinson and Milly Arnott, who had friends in Palestine, were charged with criminal damage to the UAV Engines factory of Israeli-owned Elbit Systems in Shenstone and found not guilty. Judge Marcus Waites said the defendants believed Palestine was an important issue and believed in what they were doing.

There is a graphic description by Sebastien Roblin in America’s high-profile Forbes Magazine of the fatal, destructive effects of the ‘asymmetric war’ between the technologically advanced Israeli Defense Force and Hamas which governs the Gaza Strip, ‘a small, isolated and impoverished coastal enclave with a population of 2 million’.

Thousands of civilian Palestinians in Gaza who have survived numerous military incursions by land and air, bear war-related traumatic injuries caused by explosive weapons – some delivered by Israeli drones.

Btselem: over 5800 Palestinians wounded in 7 motths of protest

Information about the long-term suffering of injured Gazans has been published in the BMJ ; the clinical study of medical findings in war-related traumatic amputation patients, was conducted in the main clinical centre in Gaza, Al-Shifa Hospital,

Among 254 Palestinian patients in Gaza with war-related extremity amputations were subgroups of patients presenting a variety of alarming symptoms and findings. 94 patients received further diagnostic clinical exploration, radiology imaging and clinical chemistry laboratory tests at the main clinical centre in Gaza, the Al-Shifa Hospital.

• Nine out of ten of the referred patients were young (median 31.5 years) males (88/94, 92.6%).
• Ultrasound imaging revealed that 19 of 90 patients (20%) had fatty liver infiltration, 3 patients had lung nodules and 10 patients had lung atelectasis on chest CT.
• Twelve had remaining shrapnel(s) in the chest, five patients had shrapnel(s) in the abdomen and one in the scrotum.
• We found shrapnel(s) in the amputation stumps of 26 patient’s amputated limbs, while 8 patients had shrapnel in the non-amputated limb.
• Three patients had liver lesions.
• Nineteen patients had elevated liver enzymes,
• 32 patients had elevated erythrocyte sedimentation rate
• and 12 were anaemic.
• Two patients tested positive for hepatitis C virus
• and three were positive for hepatitis B virus (HBV).
• One of the 19 patients with fatty liver tested positive for HBV.
• Two of the patients with fatty liver infiltration had elevated glycated haemoglobin levels and confirmed diabetes mellitus type II.
• Nearly half (44, 8%) had remaining metal fragments from explosives of unknown composition harboured in various parts of their bodies. All patients identified with lesions and nodules are being followed up locally.

The researchers concluded that it is unclear to what extent the injuries sustained by modern weaponry may increase survivors’ risks of negative long-term health effects and serious illness. They cannot anticipate the long-term health consequences of living with metal residuals from explosive weapons embedded in body organs and tissue.

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The May airstrike demolishing Gaza’s al-Jalaa building will be investigated by the ICC

On 3 March 2021, the International Criminal Court’s Prosecutor announced the opening of a formal investigation into alleged war crimes in the Palestinian territories in the state of Palestine.

The Middle East Monitor (MEM)  thinks that the ICC decision gives some reason to believe that ‘accountability is looming on the horizon’. Palestinians also hope that Israel’s impunity will end and that its extremist government and illegal settlers will no longer be allowed to commit such acts across the occupied Palestinian territories.

Israel does not recognize the ICC’s jurisdiction and says it is capable of investigating any possible wrongdoing by its army. It asserts that the investigation  is unfair and politically motivated.

America’s Associated Press (AP) has called on Israel to make public the evidence it used to justify the May bombing of the al-Jalaa building

At the end of October, speaking at a conference hosted by Tel Aviv’s Institute for National Security Studies about the importance of public perception during military conflicts. Maj. Gen.(res.) Nitzan Alon, the former head of IDF Operations admitted:

“Bringing down the tower with the AP offices was equivalent to a self-inflicted ‘public relations terror attack’ and an own goal, in our view. Not everyone in the IDF believes this, but I am convinced that this was a mistake. The operational benefit was not worth the damage that it caused diplomatically and in terms of perception”.

Palestinians inspect their destroyed houses following overnight Israeli air strikes in town of Beit Hanoun, northern Gaza Strip, in May 2021

Though due to a warning the building was evacuated and no lives were lost, the case for a war crime could cite the further long-term economic damage done by the May attacks. Many jobs were lost with the closure of companies sited in the building and many families were displaced. Human Rights Watch pointed out that there will be serious, long-lasting economic damage to the Palestinians who lived, worked, shopped, or benefited from businesses based there .

 

 

 

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Airstrike was a “tragic mistake”: Gen. Frank McKenzie (US Central Command)

Pentagon spokesperson John Kirby said in a statement late Friday that the United States will make “condolence payments” to families of Afghan civilians killed by mistake in U.S. drone strike on August 29. File photo courtesy the U.S. Department of Defense.

CNN reports that Pentagon press secretary John Kirby (above) said in a statement last week that a senior Pentagon official held a virtual meeting about a potential compensation payment for the family of Zamarai Ahmadi, an Afghan civilian who was one of 10 people killed in a US drone strike in late August. Ahmadi’s two year old niece, Malika, as well as her uncle, her seven cousins, and another child were killed in the strike.

The discussion with Steven Kwon (right), founder and head of Nutrition and Education International, the US non-profit charity that employed Ahmadi, focused on a compensation payment for his family and their desire to relocate to the United States. Kirby said no formal agreement has been reached at this stage.

Under Secretary of Defense for Policy Colin Kahl, said that the strike was a tragic mistake and that Mr. Ahmadi and others who were killed were innocent victims who bore no blame and were not affiliated with ISIS-K or threats to US forces.”

The Defense Department, which handles compensation payments through its regional combatant commands, has not been able to speak directly with Ahmadi’s family because there are no US troops in Afghanistan to lead the discussion.

Also complicating the conversation is the family’s desire to relocate to the United States, a decision handled by the State Department, not the Pentagon. At the end of September, Kirby said Defense Secretary Lloyd Austin would support the relocation of the family to the United States. Kahl reiterated that support during the meeting with Kwon.

Dr. Kwon told Mr. Ahmadi’s story of working with NEI over many years, providing care and lifesaving assistance for people facing high mortality rates in Afghanistan. NEI’s Dr. Kwon’s pledge to honour the memory of Ahmadi (left) and his family members and others who were killed in the strike,” Kirby said.

Ahmadi was one of 10 Afghan civilians, including seven children, killed in a drone strike during the final days of the US evacuation and withdrawal from Afghanistan. Initially, the Pentagon defended the strike, pointing to secondary explosions as proof that there was explosive material in Ahmadi’s car.

Nearly three weeks later, the leader of US Central Command, Gen. Frank McKenzie, admitted that the strike was a “tragic mistake” following an investigation into the facts and circumstances around the strike, led by Lt. Gen. Sami Said, Inspector General of the Department of the Air Force.

This is just one of hundreds of tragic ‘mistakes’ – usually downplayed or  denied.

What can justify such losses of human life?

 

 

 

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