This summer we saw Europe experience an unprecedented heatwave, the worst heatwave since records began. Added to this, we have seen an increasing number of devastating wildfires, and Beijing has seen its worst flooding in 140 years. Not only is the impact of climate change causing devastation in countries ranging from Ethiopia to Pakistan, but the further implications of climate change will also create secondary challenges including poor harvests and migration flows.
In this episode of Geopolcast, Elisabeth Braw, senior fellow at the American Enterprise Institute, discusses the implications of climate change with Lieutenant General Richard Nugee, Non-Executive Director of Climate Change and Sustainability at the UK Ministry of Defence, and Helene Galy, the Managing Director of WTW’s Research Network.
What does national security really mean for a nation? To preserve the way of life of the country as it knows it and as it wants to live. To be able to live the life you want to live in your own country. That is what I think national security is all about.
ELISABETH BRAW: A warm welcome to Geopolcast, a new podcast from WTW exploring geopolitics and its impact. My name is Elizabeth Braw. I'm a senior fellow at the American Enterprise Institute, and I'm also a columnist for foreign policy and political Europe. And I focused on the increasingly busy intersection, extremely busy intersection by now, between geopolitics and globalization.
Now, in each episode of Geopolcast, I'm joined by 2 experts with whom I discuss the subjects that matter to people in the business community and in fact, everyone in the globalized economy. And today, I'm delighted to be joined by 2 experts, who have outstanding expertise and knowledge in the area the, vast area that it is implications of climate change. Now, Lieutenant General Richard Nugee is the UK Ministry of Defense's Non-executive Director of Climate Change.
The uncertainty and difficulty to quantify the security impacts of climate change, and in particular the material impact on the company’s business model, their customers and their employees, shouldn’t stop companies trying to grasp what is relevant.”Helene Galy | Head of People Risks Research, Managing Director of WTW Research Network
He took up the civilian role after retiring from the UK Armed Forces in 2021. And before retiring, his last role in uniform was leading the Ministry of Defense's Climate Change and Sustainability Strategic approach, which I might add, was a pioneering effort and one that was watched by many ministries of defense. Before that, he was the MOD's Chief of Defense People, and he has also done several tours in Iraq and Afghanistan.
Helene Galy leads the research arm of WTW, which is the WTW Research Network. And this network connects academics, universities, and think tanks, and indeed, the business community with the goal of better understanding future risks. And she has long focused on natural hazards, which actually goes back to her first job when she modeled flood risk, a timely subject if there was ever one.
And I'm sorry to say this, but this episode of Geopolcast has perfect timing. As we record, Europe has just been through an unprecedented heat wave. And by unprecedented, I mean, the worst heat wave since records began. We're seeing an increasing number of devastating wildfires including on Hawaii.
Beijing has seen its worst flooding in 140 years, and that's nothing compared to the impact of climate change in countries ranging from Ethiopia to Pakistan. And as we all know, climate change will create secondary challenges, including poor harvests and migration flows.
Now, General Nugee, in your reports for the MOD, you point out that climate change threatens peace, and you list the ways in which this can happen. Health crisis and civil unrest are two of them. Now, for our listeners who may not have read the report, can you summarize the other ones and maybe, rank them in order of urgency?
RICHARD NUGEE: First of all, thank you very much indeed for having me. It's a real pleasure to talk about this subject because I think it's a really important subject.
The preservation of peace and our security, human security and that national security, is a really important subject for everybody to understand. And how climate change is affecting that, I think is one that is becoming better understood but is not well understood at all. And I think that there are so many ways in which climate change are affecting geopolitics but also affecting people's security.
And it's interesting that only a couple of days ago, a African think tank made up of African leaders, reckoned or described the coup in Niger as the first climate change coup, that actually, the coup was as a result of the pressures that climate change are bringing. And what those pressures are is, of course, pressures on food stores and the ability to farm, and pressure on water. And the two of course, are inextricably linked.
But the effect of that is that farmers very often are moving away from their farms when they can't make a living from it anymore and as a result, are going into the cities. And we're seeing this particularly as an example in Somalia, where the farmers are moving into the cities and become ripe candidates for Al-Shabaab, and in Nigeria for Boko Haram, and ISIS in Iraq, just as examples.
And in Iraq, ISIS were actively recruiting and actively targeting farmers to recruit into their environments. And one can understand why because farmers have lost everything. They've lost their livelihood. They've lost their land. All as a result of climate change. That's not the only way that climate change is affecting farmers. If you go to Afghanistan, for example, the summer melt is happening far faster because the heat is far greater and so you're getting a much greater level of water coming off the melt more quickly.
And what that's doing, of course, is causing floods. But the other thing it's doing is because there's only a finite amount of ice that is melting, it means that there's drought immediately after that. And as opposed to a consistent amount of water coming down the mountains over the summer, which sustains farming.
You're getting floods which destroys the farm, followed by drought that destroys the farm. And you're getting, again, Afghans moving to support terrorist organizations and what we would call terrorist or alternative organizations. Non-state actors is the phrase that's often used. And that's just one example. But there's another sort of piece that I would stop because this is for me, this is the most worrying of them all.
Migration and moving has been a human response to crisis for generations, for millennia. People move out of a difficult environment. And you go back to the earliest civilizations that humans created hundreds of thousands of years ago or a 100,000 years ago, and people have moved. They've moved because the climatic conditions have changed.
In the 20th century, a lot of people moved because of conflict. So you move away. And we've seen that in Syria. People moving away from the Syrian conflict. People moving away from Ukraine, obviously. And Europe has been, if you like, I would say, the beneficiary of a large number of people moving out of Ukraine during the war. Women and children primarily. But really, interestingly, as soon as the war is over, they all want to go home.
They want to go home, and they want to go back to the livelihoods they had and rebuild. If you are the victim of climate change, you have stayed as long as you possibly can because the thing that is destroying your ability to live is temperature and lack of water. And so you'll stay as long as you possibly can. When you move, you're forced to move. You can't go back because there's nothing to go back to, and you move with nothing because you've lost everything trying to stay there.
So migration, I would argue-- now, the UN would say that 90% of those, who move to a similar region don't come out of the region. That means 10% move to different regions. Now, the reality is it's probably 20% move rather than 10%. The figures show. The UN predicts a billion people displaced by climate. A billion by 2050 is what they're saying. And actually, some say, it will be earlier than that. Even 10% of that is a 100 million people moving because of climate change out of their region. And if it's the more likely 20%, 200 million moving out of their region, where are they going to go? They're going to go to areas of the world, which are less affected by climate change. And that could be anywhere, and that sort of movements of people is something that is unprecedented.
From conflict, we usually see-- a tragic though, it is about 10 million people leaving. Between 10 and 15 million people leaving their region at any one time. We're talking about a 100 to 200 million. This is a major, major impact on all societies. And we need to understand that and try and do something about it. So those are the sorts of security issues that we really ought to be paying attention to.
ELISABETH BRAW: Yes, and as you say, neither temporary nor limited to two geographic region. As you were speaking thought of the Horn of Africa, where there have been constant conflicts. But if you're in the Horn of Africa and you're fleeing a conflict, you can at least, flee to a neighboring country in the Horn of Africa. But the Horn of Africa is also a major victim of climate change so there is no staying in the Horn of Africa if you are fleeing for climate change reasons, which will increasingly be the case.
Now, Helene, against that background, where do we begin? And I want to ask you about companies. But maybe, before I bring you in and talk about what the global private sector can do, General, if we can come back to you again, how can societies even prepare for such crises? And whose responsibility is it? And then we can ask Helene what companies can do.
RICHARD NUGEE: Well, I'll keep it very short because I could answer this for hours and hours. And forgive me, I probably would if I was given the chance. I think there are two very important aspects to this. One is that I've done sort of quite a bit of time trying to work out what does national security really mean for a nation? What does security for a national security really mean?
And what it really means as far as I can tell, if you boil it right down to every individual country, and it will be different for every country, it is to preserve the way of life of the country as it knows it and as it wants to live to be able. To live the life you want to live in your own country. That is what I think national security is all about. Therefore, it is a government issue. Therefore, the government should do something about it of.
Every country, the government should do something about it. So what do you do about terrorism? About conflict, which as you say, all the countries, south of Sahel are in conflict now. It used to be one or two countries at any one time. Now, it's every single country has a degree of conflict in it. That is a change. What do you do about it?
I genuinely think there is opportunity here for countries that have the ability to support those countries that are most affected by climate change through, not necessarily money-- although that of course, is a part of the equation-- but through expertise, through innovation, through different technologies, to try and build resilience in those countries and that's resilience in terms of adaptation. Yes. But it's also resilience in terms of governance and resilience in terms of these countries are likely to go through some difficult times.
If we can help them, obviously with their permission-- and that's difficult in a conflict country as to who you're helping. But actually, if we can try and build a consensus that actually there is an opportunity to build resilience-- Bangladesh is a really good example. It's not in conflict, but actually, it is really going to suffer from rising sea levels and floods. If we can build resilience in that country and help them build resilience, then I think there's an opportunity to try and reduce the migrant flows and reduce the incidence of conflict. And that, after all, is what we should be trying to do.
ELISABETH BRAW: That is a really good example and also highlights how this goes far beyond small measures like measuring our own carbon footprint. That was yesterday now. Much, much more significant action is needed by governments in developed economies, developing economies, preferably together, and indeed, by the private sector.
Helene, what do you think companies can do to be good corporate citizens in this really absolutely, extraordinarily growing challenge?
HELENE GALY: Thank you, Elizabeth. And thank you for setting the scene so well.
Well, I think unfortunately, companies are probably not doing enough, especially if we're talking about the security impacts of climate change, which are second order effects of climate change. And I think it's hard enough to get governments and corporates to fully integrate in their strategy. The more immediate impacts of climate change-- extreme weather, chronic risks, liability risk, reputational risk.
And sadly these direct impacts are hiding the very real risks posed by a wide range of security impacts of climate change as outlined by General Nugee. So in July this year, the Institute and Faculty of Actuaries published a report on the climate modeling done in the heavily regulated financial sector. And this report concluded that modeling is significantly underestimating climate risk. And amongst the many reasons, they found that modeling and scenarios ignore tipping points and ignore effects such as mass migrations.
This type of highly likely yet ignored threat is called a "gray rhino." And you know, why are these gray rhinos largely ignored by companies? And I think it boils down to two main reasons. There's a short sightedness and an inability to quantify. So suppose for short sightedness, we have a combination here of the tragedy of the commons. So there's this short sightedness in space but also, the tragedy of the horizons. The short sightedness in time.
And understandably even with limited resources, it's only natural that companies tend to focus on the here and now or the next few years. But probably, the second and bigger challenge is the uncertainty and the difficulty to quantify those security impacts of climate change, and in particular, the material impact on the company's business model, their customers, their employees.
There's no simple model around for companies to model those security impacts on their business. And if there was, the uncertainties of all the possible ramifications would be so overwhelming. They probably would be not terribly useful. But it does not mean, and it shouldn't stop people trying to grasp what material changes would be relevant for a particular company.
And I think you just need a bit of imagination and courage to consider a few scenarios. So for example, do you rely on water availability to cool your plants or to make whiskey? Do you do you operate in areas that are coming under water stress? And maybe, this is bringing your interests in conflict with local communities or other sectors relying on water and jeopardizing your social license to operate in this area? I mean, these are likely scenarios to consider.
Now, think when you ask me the question, Elisabeth, about good corporate citizens, I think you put the bar a little bit high. And I don't think we have to go that far. It makes economic and business sense to look at those medium longer term scenarios and to prepare for them. It's probably not enough, but I think it would be a very good start.
ELISABETH BRAW: And on that note, Helene, do you think there's also benefit to company's reputation if they take real action, both in terms of reducing their own CO2 emissions and when it comes to helping their own countries and other countries live with the effects of climate change? I won't mention the company by.
Near me, in London, there is the headquarters of a company that is a major CO2 emitter. And their logo on their headquarters is so small because clearly, they are a bit embarrassed about their actions. And I think the next generation, generation Z is very aware of the effects of climate change also because they will live with the effects of climate change. So do you think that sort of public pressure will, in essence, incentivize them to do more to reduce CO2, their CO2 emissions and to help mitigate the effects of climate change?
HELENE GALY: Yeah, definitely. And I mean, see companies are forced to choose spend an enormous amount of time on disclosure. And I've heard companies say that they've got to fill in so many disclosure reports in various form that their sustainability departments have very little time to actually do sustainability. So hopefully, we can have a change of focus from not only talking about things but doing something. So definitely need to look at a bit more action there.
RICHARD NUGEE: Elisabeth, can I come in here?
ELISABETH BRAW: Yes.
RICHARD NUGEE: Because if you like experience of how I tried to persuade the Ministry of Defense to take this seriously-- and in fact, in my original report, which wasn't published they the government produced, if you like, the digest is the strategic approach. It's a sort of synopsis of my report, which was about 500 pages long in the end. And if I'd written it now, it'd be an awful lot better than it was then. I just wasn't very good at writing.
But one of the things that I worked out quite quickly is that I was dealing with a group of very, very skeptical officers and military. And depending on which country you're in, depends on how skeptical they are. But even in the UK, the military were, this is nothing to do with us. Why should we care? We just go and do what the government tells us to do.
And I persuaded them that there were two reasons why this would be a very good idea. And this applies to companies just as much as to the military. The first was there is an economic advantage-- in our case, military advantage-- in embracing some of the new technologies that actually are adversaries and not embracing, which will give us literal advantage on the battlefield.
And in a business sense, it's if you can find that particular thing that will give you economic advantage or some other form of business advantage, then it is worth doing. And so it's got to be-- I mean, I spent my entire time thinking about persuading the finance director. Nobody else. I was spending my entire time thinking of this finance director in the Ministry of Defense and saying, I want to spend 200 million on solar farms for the army or the army wants to spend that.
What is the argument that will win to spend 200 million on that as opposed to a new F-35 or a new tank or whatever? And the argument that I made in that case was about resilience. The army needs its own electricity supply if the rest of the country doesn't have enough. But there's another side to it, which actually, it would save money in the long run. And I think if you can find ways that businesses can save money-- so there's an economic argument in terms of product but if you can save money as well.
There's a brilliant example, and I can't remember the name of the company-- forgive me-- who used a lot of water in their manufacturing process. And they suddenly realized or somebody told them that actually, all the water that was coming off their factory roofs was just going down the drain. If they captured that water and used it because they didn't need pure water-- they just needed water to cool things. If they used that water, then actually, they would save money.
And they saved 50% of their water bill just by putting in, what I would call a water butt, what they probably called a water tank. And so actually, thinking in those terms for companies, how can you become more efficient using what's around you from a different perspective as opposed to just assuming that water goes down the drain? That's just an idea that I think all companies could look at and say, how can I make myself more efficient? And that's no different to the military.
ELISABETH BRAW: That makes incredible sense. And as you say, if you present it that way, then it becomes totally obvious that that's the best strategy. And indeed, it has multiple benefits. If I can just ask you, General, about the shorter term perspective or indeed, maybe, a similar time perspective but with a slightly different focus, it is preparedness, and the government, and the private sector preparing together for climate change related disasters.
We have just been through the wildfires on Maui when it turned out that the government and companies were completely uncoordinated. And that is often the case when it comes to climate related disasters. Do you think that there is scope and indeed, need for ministries of defense to team up more with the private sector to exercise these types of scenarios? And how would they go about it?
RICHARD NUGEE: So I think there's two answers to that. One is national preparedness is something that all ministers of defense should take care of. All the reports from academia suggest that the military are going to be more involved in humanitarian assistance across the world and disaster relief at home. And you see that with the US National Guard in big, big sort of dollops.
You see that in this country in the UK in much smaller quantities, but it's still there. We do the flood relief. Well, if you look at Pakistan and the a third of the country under water, it was the Pakistani Military who were used to do a lot of the heavy lifting to try and solve some of the problems and channel the water and all the rest of it.
And similarly, in Australia, soldiers have been used, first of all, for COVID, then for the wildfires, and then for floods. They're being taken away from their day job of preservation of security in order to be able to do national crisis response. What we call military assistance to civil authorities in this country. But that's just a sort of tagline.
Yes, absolutely. We should be prepared for that. But I think there's another side to it. And it's something that I've called for publicly, which is to have what I've called a Climate Change National Security Center. And in that center, it wouldn't just be the military, but it's most government departments. And much more importantly, it's the insurance companies. It's the banks.
It's the big business of the country getting together to understand the security implications, and in this case, personal security of the individuals of the country because they're about to be flooded out or whatever. But the security implications of trade and so on that will come from the difficulties of climate change in due course. We're not there yet.
But I think that having a Fusion Center or some sort of center, which understands the security implications. Yes, of course, the military would be there, but it's much wider than the military, and it should incorporate business as well. Then we'll get a genuine picture of what to do about it. And I don't think that exists at the moment.
ELISABETH BRAW: Helene, lots of companies are putting forward presentations of what they are doing in both in CO2 reduction and in climate change adaptation. And it's difficult, I think, for the general average citizen and indeed, even for well-informed citizens, to understand who is doing really well and what really the best practices are.
Are there any best practices that you would highlight both in CO2 reduction, and in climate change adaptation, and other steps that seem obvious to you, both from a business perspective and from a climate perspective?
HELENE GALY: Yes, so I don't envy the task of leaders, who have been dealt a very difficult hand and need to steer their country or their company through this difficult energy transition while other risks are still piling up. So other geopolitical risks. It is true that geo-- greenwashing is rife. And consumers and citizens have a role to play here.
I worry about the backlash that is leading to "green hushing." Many companies, we notice, are shying away from publicizing their Net-Zero Emission targets to avoid scrutiny and allegations of greenwashing. And I think no one is winning here. So where are things going to land, I don't know, but you're right. We need stories that inspire change. At least, that might inspire the further change in other companies.
And there are some encouraging stories. For example, there's an energy company in Denmark, which in 2009, was getting 85% of its heat and power from coal. And that company was inspired by the UN Climate Summit but also, by local opposition to their operations. And so they formulated a radical strategy called 85/15, radically aiming for different power mix. 85% from renewables and 15% from conventional.
And they give themselves one generation to achieve this. And in fact, that company got there within a decade, and they are now the global leader in offshore wind. So that's really impressive.
ELISABETH BRAW: And I was going to say, that is a case study in what a company can do without risking the health of its bottom line.
HELENE GALY: That's right. So that's almost looks like a win-win. But I don't think a fast and successful transition is open to all sectors and all countries. We need to think about countries that are so dependent on fossil fuel revenue, who at some point, will face a revenue gap. Or we need to think about sectors such as the aviation sector, which is one of the hardest to decarbonize.
And it's an interesting case of a "wicked problem," and that's a technical term for a problem that has no immediate solution or that involves very tricky choices. So for example, consider the growing imperative by regulators in Europe and the UK, and the US for airlines to use more Sustainable Aviation Fuels.
SAFs. Realistically, we would need to ramp up the production of SAF much faster than we are currently.
And this may also encroach on available agricultural land. So that's a trade-off that was highlighted by the Royal Society in a report published in February this year. It could be that this energy transition clashes with food security. And so this is really a wicked problem because there are alternatives such as hydrogen, and they're not yet within reach.
And food security-- chains the food supply chains are really expected to be disrupted and challenged by climate change in the UK. We import 46% of our food. And we're supporting a research project at the University of York at the moment that is titled, "How would the UK feed itself amid catastrophic food system disruption?" This is likely, sadly to be very relevant. So yeah, something to watch.
ELISABETH BRAW: Indeed. And on top of that, so you're saying that even if companies do have a model for how they want to decarbonize, that would then have a potentially disastrous effect on other sectors? And on top of all of this, so we have companies that are trying some energetically, some less energetically, but they are aware that they need to reduce CO2 emissions and adapt to changing climates.
And we have the wider public of people who are confused, in some cases, feel strongly about climate change and CO2 reduction or I should say, greenhouse gas reduction and climate change adaptation. But then we also have a small group on the fringes of climate activists. I mean, I was listening to a podcast the other day from Pool Re about eco-terrorism.
And there is a case to be made that this is something that-- well, it already exists and may grow as our situation, as climate change continues to worsen. And many people or a small minority but a growing minority say, well, we are not going to be able to change anything with peaceful means. We have to use violence. So what do you make of that, and what should companies make of that?
HELENE GALY: Yes, today, we've explored various layers of the challenge. And one dimension, I think, we could explore more is this social descent driven by climate change. Driven also by the lack of decisive action to mitigate climate change. And to simplify, we can look at social descent at very small scale. Eco-terrorism, as you've mentioned. Larger scale, environmental activist movements. And then that full societal scale of just looking maybe, at consumer groups and the consumer power.
And all these shifts are going to have very material impacts, obviously, on national security, but also on businesses. And so that might be worth a separate podcast. But consider the disruption created by various activist groups such as Extinction Rebellion, Just Stop Oil. The business interruption goes beyond the companies that were targeted.
There's a lot of collateral damage. This might increase. There's actually an argument, as I alluded to, that in the face of lack of action by governments and by business, some of those activists might get radicalized, and might get splinter groups, and more eco-terrorism.
And at the moment, eco-terrorism only accounts for 0.1% of the incidents recorded in the global terrorism database. This could increase, and it might still remain a minority but still have a material impact. And as you say, there's an excellent podcast produced by Pool Re on this topic.
At the other end of the spectrum, we should also consider the power held by consumer groups. And I know that's a topic that you've written about, Elisabeth. Consumer boycotts can be triggered after geopolitical events, and we've seen the backlash for companies still operating in Russia after the invasion of Ukraine. But it could also be justified on environmental grounds.
So I mean, this is less dramatic, but it could have more impact. Consumer patterns are also shifting also on environmental grounds. And that's a more Pacific lever for change but something that companies should look at. So hopefully, we'll get more consumer pressures and less eco-terrorism. But overall, I think social dissent needs to be looked into more.
ELISABETH BRAW: General, we are out of time, but just in 5 seconds or less, what is the one thing that governments, ministers of defense, companies, can do without setting in motion this whole unfortunate chain of events, where climate change triggers second order effects that we don't want either?
RICHARD NUGEE: Very briefly, understand their role in both improving emissions and improving the adaptation and the resilience of countries around them so that we reduce security problems and reduce conflict. Conflict is a real problem for climate change. Conflict produces huge emissions. Just look at Ukraine.
So trying to avoid conflict is the right thing to do. And governments and ministries of defense should understand what the implications are of climate change in order to deliver conflict and therefore, to try and avoid it.
ELISABETH BRAW: Thank you, General Nugee. Thank you, Helene Galy. And thank you to our producer, Robin Pegg. And above, thank you all for listening to Geopolcast.
I think we agreed that this is a subject we will have to revisit because climate change will continue to worsen unfortunately, over the next few months and possibly, years if we don't manage to come up with a radical solution that encompasses every country on our planet.
But in the meantime, we will be exploring the implications of climate change here on Geopolcast podcast. And in upcoming episodes, we'll also examine supply chain risks, sanctions and much else.
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Elisabeth is a Geopolitics expert who has been consulting with the WTW Research Network since 2019, specifically exploring grayzone aggression and looking at its implications for risk managers. This work forms part of a wider research programme on geopolitical risk, including the importance of China and security impacts of climate change.
Elisabeth is a resident fellow at AEI, where she focuses on defense against emerging national security challenges, such as hybrid and grayzone threats. Concurrently, she is a columnist with Foreign Policy, where she writes on national security and the globalized economy, and is a member of the National Preparedness Commission (UK).
Hélène joined Willis in 1998, specialising in natural hazard modelling and reinsurance optimisation. Since 2001, she has been leading multi-disciplinary teams, who research, design and develop analytical solutions and insights for risk identification, quantification and management. She currently leads the Willis Research Network, an award-winning public-private partnership, which harnesses over 60 science partners to form innovative long-term collaborations, improving our understanding of risks (natural hazards, technological risks, geopolitical drivers of risk) for the benefit of clients and society: using science to support resilience.
Hélène has extensive experience in spatial modelling, design of innovative solutions, and applying science to business challenges. Her current focus is on Climate advisory services (advising corporates on how leading-edge climate research can help them quantify their exposure to climate variability and climate change; exploring the links between climate change and national security) and on People Risks (how people can increase vulnerability or improve resilience: terrorism, societal resilience to systemic risks, including pandemics).
She holds a BSc in Economics & Political Science (Sciences Po), and an MSc in Environmental Economics (UCL).
His last role in uniform was leading the MOD’s Climate Change and Sustainability Strategic Approach and prior to that, he was the MOD’s Chief Defence People, and also did several tours in Iraq and Afghanistan.