Hi everyone! I’ve taken a couple of months off of extended writing - I have been waiting for good topics to focus on which I feel like I can provide some genuine insight and commentary. My energy levels have also been a bit low on the writing front - between the heatwaves here in the UK and parenting - so forgive me for the relative radio silence.

But now we are well into what we’d call back in the States “the dog days of summer” and amidst another heatwave and drought, the European Central Bank (ECB) published long-awaited results of its geopolitical reverse stress test with 110 participating financial institutions. Like many other regulators, the ECB regularly tests its banks on capital adequacy (ICAAP) as part of its core supervisory responsibilities. The purpose of these stress tests is for the regulator to understand how well the banks which make up the financial system would hold up under negative scenarios, and if/how/when they are vulnerable to liquidity and solvency challenges. The eurozone crisis and subprime mortgage crisis are just two of the events which justify rigorous oversight to protect not economic health but also social and political stability of the bloc (e.g. Greece 2010).

It’s probably a good time to run this test - the ECB has noted geopolitical risk as a material macro risk as part of its supervisory interests since at least 2024. Reasons include:

• Intensifying trade competition from both China and the US

• A concerted pivot to drive more private and public investment into critical infrastructure, defence and the energy transition, led by initiatives like ReArm Europe, European Green Deal, REPowerEU and Electrification Action Plan.

• AI-driven disruption to financial markets and real economy

• And (of course) - overlapping conflicts in Ukraine and the Middle East, and their myriad ripple effects into European economies, politics and society

So it is fair that the ECB wants to have good visibility on whether banks have solid and well-founded understanding of how geopolitical trends and events can manifest and impact their activities.

What’s different about this type of stress test is that, rather than being given a scenario and then asked to assess risk drivers and impacts to capital, liquidity and solvency, the ECB this time gave the banks an outcome, and ask them to craft up to five geopolitical trigger events which could lead to that outcome. In this case, the ECB chose a major capital depletion which challenges the banks’ liquidity / capital reserves and challenged them to show how geopolitical events transmit risk and impact to their activities e.g. lending, asset values, retail banking losses etc.

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The results were not entirely surprising:

• Most banks got the assignment, and were able to craft reasonable geopolitical scenarios such as Hormuz, US-China tensions, a blockade of Taiwan.

• They were generally good at showing how geopolitical risks show up in the real economy (trade, commodity flows) and financial markets. But they were less proficient in understanding and demonstrating how - and how much - events led to operational risks such as cyber, reputational, fraud, staff safety and security. This is unsurprising as stress-testing functions within banks historically are not purposed to account for non-financial risks with great sophistication.

• Unsurprisingly, it was pointed out that banks are overly confident and optimistic of their own ability to anticipate manage risks in a crisis situation. The ECB highlights that banks would struggle to execute their mitigations when many of their peers would be doing very similar things in a crisis. This makes sense (e.g. if everyone is selling down, who’s buying? If everyone is trying to medivac using ISOS or Healix, who does the vendor prioritise). But there is more to this - have banks stress tested their crisis management plans rigorously beyond operational and cyber risks? For many banks, I’m doubtful.

• Banks listed their mitigations, or what they would do to respond and manage the crises they’ve sketched out. The top two cited measures were tech resilience / cyber recovery (79% of banks said this) and enhanced monitoring / early warning (60%). Shouldn’t early warning be in place beforehand? If you’re reading this as a CSO or geopolitical analyst, please use this in your next Board or Risk committee presentation, or at the next annual budget submission.

• The section regarding operational risks is acknowledged but its treatment is far more qualitative and less rigorous - and many banks would appear to struggle to quantify the transmission channels into balance sheet and liquidity impacts. While other regimes like DORA cover some of the operational resilience gaps, there is still a gap on transmission channels that should be filled in future ICAAP iterations or in bilateral (regulator-bank) engagements.

• And what’s next? When the ECB starts something, they tend to keep going. See: cyber, climate. Physical and transitional climate risk management, as another cross-cutting risk you can’t run away from, may be a good guidepost for how European banks may be asked to comply on geopolitical risk management going forward. This is almost certainly just the start on geopolitical risk management supervision and enforcement. If you’re in corporate security and in Europe, you need to be thinking about how you can leverage what’s to come to further grow your function, budget, influence and impact.

• If you’re a risk manager that has the ECB as a regulator, it’s best to make friends in the security, intelligence, geopolitical and government relations teams.

Now, for subscribers, let’s take a deeper dive:

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The July (and early August) 2026 edition of the Geopolitical Risk Regulatory Tracker covers:

• Updated enforcement risk scores across 22 global regulators

• Updates from ECB on its geopol supervisory work and UK PRA’s insurance sector cyber exercises

I will be putting out my take of the ECB SSM reverse stress test results in the coming days, with a fuller analysis for paid subscribers.

If you’re yet subscribed, hit the Upgrade button on the Substack site or app to get the tracker!

A number of readers, especially those of the antipodean disposition, will have seen the Australian Prudential Regulatory Authority (APRA)’s latest guidance on minimum expectations for how its regulated entities (banks, insurers, funds etc) should be managing geopolitical risk. There’s a lot to digest, and is the result of over two years of work and engagement between the banking sector and APRA alongside the Council of Financial Regulators, Australia’s coordinating body between regulators (nb: the other regulators being its central bank (Reserve Bank of Australia), the markets and consumer credit regulator (Australian Securities and Investment Commission) and the Treasury).

You can read the full blast here and subscribe the latest edition my geopolitical regulatory risk tracker to find out key areas of action for geopolitical risk teams. But for those of you sitting at an enterprise risk / geopolitical risk / or even climate risk space, what should you take away from this latest guidance?

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First, what’s in it?

• Geopolitical risk needs to be embedded in corporate strategy, governance, risk appetite and Board oversight. In essence, Boards own this now

• Governance needs to effectively connect persistent threat monitoring with coordinately, timely decision-making during a crisis. Crisis management and playbook are spotlighted.

• How organisations deal with organisational resilience to geopolitical shocks and shifts now need to be evidenced and tested

• Personnel security, critical staff availability, insider risks, foreign interference challenges need to be assessed with appropriate resources and frameworks to mitigate those risks

• Sanctions and offshore exposures need to be assessed to vulnerability to policy changes

• Capital and liquidity planning as well as stress testing need to incorporate geopolitical risk scenarios more realistically than prior

There’s a lot here to digest so I’m going to break it down into a few “so what’s in it for you” parts:

Health warning + “I’m not Aussie, so what”

First, guidance is a step towards implementation and enforcement. While there’s no “one size fits all” approach expected from APRA, given the diversity in activity and size of the firms it supervises, there are clear baseline expectations which also connect with existing enforced regulatory regimes.

Trust and believe that not meeting minimum expectations is going to lead to tricky conversations and unpleasant enforcement actions.

And if you’re not an Australian firm or have major financial activities in the country, you should still take note. Chances are, some form of regulatory oversight involving geopolitical resilience is coming to a regulator near you. As I’ve pointed out in a previous note and in the tracker, we’re seeing elements of APRA’s approach being taken up by the ECB and UK PRA (observe the cross pollination in white papers such as this from the RBA in 2025), and the Iran war is almost certainly going to get other regulators thinking about how they supervise their own regulated entities around geopolitically-related risks. At a minimum, they’ll be watching APRA’s work closely, see what works and doesn’t, and potentially apply the good stuff on their shores.

For enterprise risk folks

I hope this is music to your ears? Geopolitical risk management inherently requires close coordination between multiple risk, operational and commercial teams to effectively build a dynamic picture of company-level risk exposures, potential impacts and risk appetite calibration. From experience and speaking with peers at other banks, different governance and coordination models exist but those who lead enterprise risk teams should be taking a leading role in at least the governance and Board / entity reporting aspects - collating and updating the catalog of frameworks and controls, metrics and management information, and ensuring that senior leaders are clear on one internal view of 1) “how well are we managing risk?” 2) “where are the highest priority pain points and gaps and what are we doing about them” 3) “which critical areas need immediate decisions?” 4) “how are we benchmarking with our peers across points 1-3?”.

If you have buying power, consider if you existing suites of tools are sufficient, or if new functionalities or new tools are needed to make your work possible. Legacy / incumbent GRC tools and practitioners are rapidly converging into the geopolitical space, but I argue these tools are typically not designed by those with geopolitical risk expertise (maybe supply chain) or with this risk in mind, so ensure what you got is fit for purpose. Specialist tools may be necessary - talk to your security / geopolitical risk teams (or me!) to see if they can help.

For security and intelligence folks

If you’re still reading this, you should already know what I’m about to say - this is a strategic opportunity for you and your team to showcase your capabilities, grow your impact, demonstrate Return on Risk and Return on Investment, and shift the narrative further that security + intelligence is a source of value creation / bottom-line positive for the broader company. Whether it’s positioning your team as a centre of excellence, the monitoring and analysis hub, the “chief geopolitical officer/office” or the lead / one of the co-leads of an internal task force (Boston Consulting Group provides a handy overview of the different types of in-house geopol setups), use this shift in regulatory focus to your advantage as you build and argue for your programme.

This is also the first time that APRA has publicly voiced serious interest in personnel security, insider risk and foreign interference. Foreign interference has been an on and off hot topic for the past decade in Australia, most prominently with raids of the offices of politicians and the introduction of new legal definitions, legislation and criminal prosecutions. In corporate structures, managing these threats are the bread and butter of corporate security leaders, and to an extent their cyber colleagues. The call to action should be to demonstrate capabilities, the value of industry and government relationships, uplift security KPIs and governance reporting, and build out insider functions - most banks in Australia can do far more on the latter. MITRE’s insider threat framework, considered to be the industry standard in classifying insider TTPs as the starting point for threat intelligence, monitoring and response, continues to evolve. Growing regulatory demand for robust insider frameworks, coupled with the risks associated with advancement and accessibility of AI applications, is likely to further drive investment and opportunities in this space.

For climate folks - energy transition and adaptation

If you an in house climate intelligence / ESG, on the consultancy, startup or investor side, why should you care? Because geopolitics is inherently connected with the energy transition, as we’ve most recently seen with the Iran war and China’s energy mix really coming through as a good energy resilience / realpolitik narrative for Beijing. While APRA regs are not a market / demand signal in the conventional sense for those outside of banking/insurance, it should be provoking folks in the climate space to think about how they’re impacted - good and bad - from geopolitical and policy volatility. I see three initial so-whats and now-whats; there are probably more.

• Banks and insurers’ calibrations of risk appetite for geopolitical risk may impact how exposures to renewables, energy trading and other energy transition investments are viewed e.g. China and Middle East

• In my earlier post on the Iran war, water security as a target for Iranian drone attacks and the disruption to ammonia supplies are just two instances of real world geopolitics and conflict impacts to energy transition / adaptation thematics. It’s worth speaking with your geopolitical and security risk colleagues / network to better understand how geopolitical developments and the shifting policy environments that emerge from that - impact your supply chain, market opportunities, or even technical vulnerabilities for your solution e.g. if a piece of weather monitoring solution deployed at a desal plant would be considered a piece of critical infrastructure worthy of adversarial targeting.

• If you’re building and selling models, geopolitical behaviour presented as policy and regulatory actions / decision forks, is probably immature but the regulatory trend would suggest you should start building more in this arena. Climate security risk transmission models can help bridge some of the gap but additional SME insights and pointers are needed to make these models actionable and bankable.

If you’re building and selling platforms

For those supporting financial services customers, this is a clear opportunity to consider how you can support uplifts in 1) governance and reporting, 2) capability, and 3) stress testing. Key areas of focus in my humble opinion, should be:

• Vulnerability mapping. Geopolitical risk is complex and means different things to different organisations. Interdependencies, as the APRA guidance points out, are inherently complex but essential to identify and assess how touchpoints with adjacent risks (e.g. AI, cyber) are understood, flagged, escalated and managed. Digital twins, causal world models and other advanced AI-powered modelling techniques to mimic how the world works could be an interesting and powerful way to identify these interdependencies and gaps at scale.

• Leveraging AI-native capabilities to convert signals into actionable intelligence connected to existing security, compliance, resilience, sanctions, operational, credit and market risk controls, ideally using explainable agentic AI workflows to perform this at high fidelity and at scale. There are a number of powerful tools on the market, both legacy and AI-native such as Mission Grey (for transparency, I am a guild expert / advisor for them) that can fit the bill.

• Dynamic heat mapping of geopolitical and adjacent risks (e.g. supply chain) against country-based portfolio exposures, digital and physical infrastructure, data flows and critical supplier relationships.

• Automated governance reporting generation across relevant metrics and highlighting key areas of vulnerability, rising / reductions in risk and impact

• Scenario modelling and development to support operational and prudential risk stress testing, crisis simulation and event playbooks.

If what you’re bringing to the table can get your clients from “1 to 2” or “2 to 4” in some or all of these areas, then it opens up a clear “compliance and governance solution” angle to your risk-based solution suite. And that could open more doors to potential customers who now need to wrangle geopolitical risk but lack the know how.

What have I missed? Do you agree or disagree on the “regulator-isation” of geopolitical risk - is it a net good or bad for risk management? And where do you see the opportunities. I’d love to hear from you.

What else caught my eye

• A powerful piece from Isaac Kardon Foreign Affairs succinctly highlighting just how radically we have shifted away from pax Americana and where the different threads that make up our global system - from energy to AI and shipping - could be headed.

• The FT looks at why there is such a gap between insurance rates and the volatile times we live in. Cheap policies today are probably underpricing risk, setting the insurance industry up for another potential abyss triggered by major catastrophes ranging from AI/cyber disruptions to another Hormuz-type event.

• Rapid advances are happening in leveraging AI for weather forecasting and reporting, much of it trained on publicly-funded data sources. Given much of the AI efforts in this space are private, it begs the question about weather data as utility or for-profit.

Dear Subscribers:

The June 2026 edition of the Geopolitical Risk Regulatory Tracker covers:

• Updated enforcement risk scores across 22 global regulators

• Major guideline and minimum expectations for geopolitical risk management from APRA

• Updates from ECB on its geopol supervisory work and UK PRA’s insurance sector cyber exercises

• And more

If you’re yet subscribed, hit the Upgrade button on the Substack site or app to get the tracker!

Subscribe now

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Dear Subscribers:

The May 2026 edition of the Geopolitical Risk Regulatory Tracker covers:

• Updated enforcement risk scores across 22 global regulators

• Updates on the ongoing exercises with PRA and ECB

• An upcoming deadline with HKMA

• And more

If you’re yet subscribed, hit the Upgrade button on the Substack site or app to get the tracker!

Subscribe now

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Hi everyone:

My friend Cory Combs at Trivium China, one of the best analysts in the business when it comes to all matters China, renewable energy, critical minerals and supply chain, have traded notes on how intersection of climate and geopolitics will evolve for many years. So as the war in Iran continues to rumble on, gas prices climb to years-old highs in the US, inflation creeping up across the board and catalysing political uncertainty from the Philippines to the UK, it only made sense to reconnect with him to get his views:

[01:28] What is the impact of the war in Iran on critical minerals and its value chain

[07:04] Why sulfuric / sulphuric acid matters and why we should be watching its price and availability

[11:14] Expectations v reality in building a secure critical minerals supply chain for the US

[25:42] Can winning examples like Lynas (Japan/Australia/Malaysia rare earth processing JV) be replicated and scaled ?

[33:02] China’s strategy to impose costs on US behaviour in critical minerals e.g. export controls and bans, and the emerging US strategy in response

[41:05] Is the Iran war going to accelerate the energy transition? Yes and no…

Keywords:

energy transition, Iran, China, US, critical minerals, rare earths, export controls, sanctions, defense, resilience

Key links:

Project Vault: the US’ critical minerals strategic reserve initiative

Forge, the US State Department’s new iteration of the Biden-era Minerals Security Partnership

Lynas

Transcript

Alan Leung (00:07)

Hi, and welcome back to another occasional edition of the Securing Our Climate podcast, where we bring industry practitioners and thought leaders at the nexus of security, climate, geopolitics, and finance to discuss key trends, risks, and opportunities. I’m your host, Alan Leung. And today, I’m joined by Cory Combs.

Cory Combs directs climate, energy, and critical mineral supply chain research at Trivium China, where he and his team provide research and strategic advisory services for a range of government agencies, corporates, investors, and NGOs. He’s a member of the National Committee on U.S.-China Relations, a regular participant in international track two dialogues, and a frequent commentator in global media. He’s also a contributing author in the Springer Nature Handbook of Climate Change Mitigation and Adaptation. Cory served at the US Department of Energy Loan Programs Office, or LPO, supporting clean energy technology commercialization through the LPO’s then $20 billion plus investment portfolio. Cory studied astrophysics and philosophy at Yale and received his master’s from Johns Hopkins SAIS where he studied energy economics and Chinese political economy. In addition, he was a Yale China Fellow in Hunan Province and was twice awarded the Starr Excellence in China Studies Fellowship at Johns Hopkins SAIS.

Welcome to the podcast, Cory.

Cory Combs (01:25)

Cheers, absolute pleasure to be here, thank you.

Alan Leung (01:28)

Fantastic. So, you know, we’ve known each other for a long time and we’ve always talked critical minerals, energy transition, renewable energy, you know, for the last several years. And, you know, really felt like those kinds of trends were really going to converge at geopolitical realities at some point. And there’s always a myth we were talking about how at what point would they really hit home for a lot of people. And I wonder if the current Iran war is one of those moments, right? Ukraine was kind of one, but Iran has really displaced a lot of energy markets, created a lot of energy insecurity issues everywhere from Latin America to Southeast Asia. So you sitting at, you know, looking at critical minerals day in, day out, you’re looking at energy transition supply chains. Curious, maybe we start off with your thoughts about the Iran war.

What does it mean for critical minerals as you see it and supply chain resilience going forward?

Cory Combs (02:30)

Yeah, let’s take both of those in turn. The first, the energy side, because obviously that’s very top of mind, but it’s also specifically a lot of the impacts of critical minerals also come from the region’s specific role in the oil and gas to critical minerals pipeline. I’ll explain what that means, but the punchline is going to come down to sulfuric acid. So it’s going to sound a little weedy, but I think it’s really important, that when these kind of deep rooted supply chains that are not usually top of mind, come to the fore of global media, that it’s a great learning opportunity for governments, for industry, for everyone really to understand how these things really work. And I think I have yet to see the critical mineral energy nexus brought to light in such sharp relief at any point in recent memory. So this is, I mean, it’s a terrible situation, but in terms of understanding the resilience issues and the security issues, this is the case to study. So it’s worth breaking out both pieces.

And so on the energy side, I say, you know, the top of mind question for everyone is energy security. And I’m sure we’ll dive further into this, but just top of mind are two quick points. One is that for most of the world, oil and gas is not energy security. It just isn’t anymore. Certainly diversified energy mix is part of that. And then oil and gas can be part of that. But no longer is the US motto of more oil, more gas equals energy security. That’s just not valid for most of the world. And this [the Iran war] demonstrates why.

And I think the second piece here is that, you know, you always hear this narrative in the US, certainly among leadership that has especially come from the oil and gas industry, that the US has ample shale gas, has always had oil, right? This is security for the US. Maybe it’s not security for the rest of the world. And we can talk about the implications of global competitiveness if the US is behind on renewables and everything except oil and gas. There is that question. But even more fundamentally, is it energy security for the US? And I think what has - shouldn’t have but has surprised a number of observers I know - is that oil and gas products, they flow to the highest bidder. And so because the world’s supply is disrupted, the US might have the oil and gas, but Americans are still feeling the energy price inflation. So even if it’s produced in the US, it’s flowing to the highest bidder, which means Americans absorb that cost as well, even though they don’t have supply shortages, necessarily.

And so this is again, a question not only of, is the world made more secure by an overdependence on oil and gas? Even the US isn’t made more secure when it comes to the pricing side. that’s the first thing I think has been very interesting to see the flow of conversation around oil and gas here. The other piece here is around sulfur. So I would say for critical minerals in general, the Iran war isn’t creating necessarily new vulnerabilities, but it is absolutely, a polite word would be stress testing.

A more blunt word would be showing how broken the global supply chain vulnerabilities really are. And the issue is that even though Iran’s not a major source of a lot of these critical minerals, is, Hormuz is a strait through which many of these pass. In addition, sulfur specifically is a byproduct in large part of oil and gas refining. And a lot of that obviously is done in the region. And then those products again flow through the strait.

Sulfur is the essential input as well as, you might guess, for sulfuric acid. There’s basically hydrofluoric acid and sulfuric acid. Those are the two. If you’re going to know any acids, know those two because those two power so many things of the world. And most importantly in this conversation, they are the inputs for processing critical minerals. If you don’t have sulfuric acid, and in some cases, hydrofluoric acid, you don’t have rare earth processing. You don’t have nickel. You don’t have cobalt. You don’t have manganese. You don’t have half of the things you need for batteries, for solar panels, for petrochemical catalysts, right? And so this is one of those kind of tier two, tier three, by which I mean just kind of hidden upstream dependencies. And it’s also critically for China. And this is a separate story, but worth noting, sulfur, in particular, is also critical for fertilizer. And for China, there are very few things more important than energy and industrial security.

Food security is one of them. Food security and Taiwan basically the top tier. And this is a direct hit in terms of food security. And so this is why we see Beijing, the central government that is, saying they will temporarily limit, or it looks like it’s going to be a shadow ban, on exports of sulfuric acid. Why? Because China is going to make sure it has what it needs for domestic fertilizer, for domestic food security, and specifically for processing all the critical minerals on which it and the world depend. That is the deeper dependency issue that Iran has demonstrated.

Alan Leung (07:04)

So, you know, a lot to unpack there, Cory, but maybe I want to stick with a sulfuric acid a little bit. Where is it manufactured? Is a lot of it manufactured in the Middle East and that’s why Hormuz is such a big concern for them? Or is it a matter of, you know, the sulfuric acid manufacturing is somewhere different from where, you know, where oil and gas are produced and exported and that Hormuz has just kind of displaced where supply and demand is. You mentioned China has significant sulfuric acid reserves. They built it up over time. Where else is sulfuric acid manufacturer created, stored? And is there enough, like with a lot of other types of chemicals and materials like ammonia, urea have come up as well when I was doing my research about what else in the supply chain is directly hit as a result of the Hormuz being shut down. Urea was one of them as well. So is there enough give in the system at the moment? are we seeing, know, so for acid is another one of those kinds of chemicals that are facing crunch times yet. Tell us a bit more about that.

Cory Combs (08:03)

Yeah, it’s one of those situations where there is production outside of the Gulf. There is just a lot of production outside of within the Gulf and more specifically, China itself imports massive quantities. I’ve seen various estimates anywhere from half to 75 % of its sulfur is from the Middle East. Most of that, not all of that, flows through the strait. And a lot of that has to do with costing. So a lot of the time, if it’s not specific heavy rare earth elements, right, most of the time outside of that particular niche, you can find, if you look hard enough, other supplies, but they might be three, four times the cost. And one of the key issues here is that minerals are already produced at surprisingly low margins. I say surprisingly, because I think for a lot of people, there’s an understanding that critical minerals, especially the battery minerals, are incredibly strategically valuable. And the batteries themselves are valuable. And the catalysts they produce and the electronics that these things go into are very high value add.

But the minerals themselves are not financially that valuable. They’re very, very low margins. And this is one of the critical issues with a lot of the critical minerals that are at risk. So just to confirm again, it’s worth backtracking a little. Critical minerals, as defined by the US government, every government has a different set. They’re very widely in terms of use and also type of markets. So lead in some cases is categorized as a critical mineral because of its functions. It’s not in danger. No one’s really worried about running out of it or it being disrupted as opposed to say chromium, which is somewhere in the middle. It’s a little more disruptible. And then you have things like molybdenum, very disruptible, right? It’s another byproduct material. And then you have gallium, germanium up the chain to rare earths, right? So the issue is that you move up that chain in terms of scarcity.

The problem is that those minerals are produced not only at low marginal value, but also relatively low volume compared to your base metals, compared to your copper, things like that. And so where is the money? The truth is there’s not that much money to be made in most of these investments, which is why there isn’t that much investment. And then with byproducts, chemicals as well, very low margin. So you need the stuff. But the people using it don’t have much flex in terms of their ability to pay. So this is where it might sound like, the price is going up. That’s tolerable. It’s tolerable until the processing shuts down because of the margin issue. Right. So yes, we can find more stuff, but there’s absolutely a critical issue in terms of timing of getting new supplies rerouted. Right. This stuff travels halfway around the world. So there tends to be weeks of delay if you, if you move supply chain suddenly, but there’s also the pricing issue that is very material. Can it be handled? Yes. It’s not existential. The world’s not going to shut down tomorrow, right. But you might suddenly see shortfalls of supplies that have typically been readily available, which cascade down the supply chain. So that’s the kind of issue that we see and that we have to work on trying to mitigate. Hope that makes sense.

Alan Leung (11:14)

Yeah, no, that makes sense. And connecting that back to the first half of your view about how the Iran war is impacting, especially in the US context around there’s a difference in supply and also the pricing, you know, where availability may still be there, but the pricing, because the markets for oil and gas are, know, oil is much more fungible than gas, is that people are still feeling that pain at the pump or at the till, you know. Connecting that back to your comments just now about sulfuric acid, you would have seen the news that the US Trade Representative, Jamieson Greer, mentioned that there should be a national security premium for the US and allied countries to buy certain kinds of critical minerals.

When I read through a little bit, feels like it’s the latest iteration of a number of attempts to create US and Allied initiatives, to create some kind of coordination and collaboration throughout the value chain of critical minerals. But this one specifically feels like more of a buyer’s cartel type of proposal arrangement. When you contrast that with what you just said about how the manufacturing and processing of these minerals is oftentimes, if not most of the time, very low margin businesses. And you’re asking potentially companies in the supply chain to stand up and invest billions in manufacturing or creating new plants and fabs for critical minerals that would potentially be sold to a cartel that has a price floor or something like that.

Given that this whole ecosystem at that minerals production and value at level is so low margin with the current economics, curious to get your views about those comments and the potential viability with the asterisk saying “details to follow,” the viability of creating some kind of cartel and really asking people to pay more when the margins are so low. Maybe that will work, but it sounds like there will be some major challenges in the economics of actually turning that kind of vision where the US and its allies have developed some kind of viable and sustainable moat where elements of that critical mineral supply chain can be secured.

Cory Combs (13:22)

Yeah. Absolutely, you nailed it. This is the story that we have been working on behind the scenes since really gallium and germanium export controls came out of China in mid 2023. I’ll say a couple things. First off, what’s the model? The model is China, as you see a lot of US policy gets increasingly Chinese, if you will, because in terms of mineral security, China certainly has its problems and certainly demonstrates it through its policy signals - uncertainty and concern about certain materials and security - but it is by far the most secure in terms of overalls as a supply chain and critical mineral security. And why? It’s not just because China has a relationship with Iran or anything like that. It’s because China produces the stuff. And where it doesn’t produce the particular input, it has diversified its sources, it has stockpiled, et cetera. China has had a very forward-looking approach to this. The problem is that no one outside of China really, and no one without China’s governance system is really going to be able to pull off the interesting marriage of private markets acting in an air like downstream with batteries and solar and all the manufacturing side led by private companies operating in the ecosystem that is basically state-backed guarantees of industrial inputs as well as energy cost management, right? That’s an unusual situation by itself.

And then you add in, of course, the difficult talking points about China’s scale - support for R&D, all that stuff absolutely applies. What the US is trying to do is finally, I think, one of the big points of progress we’ve seen over the last few years is the US understanding it cannot go out alone. The Biden administration clearly understood this with failed ventures, but ventures like the Critical Minerals Partnership, which predates all of this by a little bit. It didn’t really go anywhere, but the thinking was there. The understanding the US can’t go out alone. needs support and allies. And now the Trump administration, I think, is, you know, at this point, realizes that you can’t just do America for America. America doesn’t have all the resources it needs. America doesn’t have the processing it needs. America doesn’t have the tech and talent to do half the stuff. Maybe it could in 20 years. It doesn’t today. And so there needs to be an international model to replicate a piece of what China has built over the last several decades.

Now, there’s several issues. One is, and I’m going be very blunt here: to what extent do you want to replicate what China has done? Because China itself is dealing with the environmental ramifications of taking on the world’s mineral processing, basically. Why does China have that? Again, back to the point about a lot of these industries being low margin and dirty and human health hazardous, They’re not very attractive industries from a commercial standpoint. They’re really only attractive from a strategic standpoint in most cases. And so, you know, China has basically managed to build an industrial ecosystem, partly through vertical integration, partly through separation of what is state versus privately managed and led and invested, of internalizing those costs and doubling down on the value out of the downstream. The US isn’t producing batteries in much quantity of note. It isn’t producing a lot of the other products, EVs, batteries, et cetera. That’s where the supply chain starts to make sense in China’s case, because the value out there can account for, as I say, losses, of the low margins and impacts of the investments upstream. The opportunity cost is basically built into the value creation strategically and financially of the big three exports and everything else like that.

So that’s really where the US and allies have to figure out what they want to do, because it’s not just a, OK, we have enough supply for what? The first key thing is for military. The US does not want to depend on Chinese rare earths for niche military applications. Understandable. No one should be depending on really any other major country for 100 % of its military input in any particular category. That’s just the security risk. But more importantly, it drives up the fear and the geopolitical risk perception that leads to other, let’s say, more provocative policies too. So there’s a geopolitical angle here too. When governments feel threatened, they act out. And when you have a stranglehold on a particular military supply, like a particular [rare] earth, they feel threatened. Right. So there’s actually there’s actually a knock-on effect, I think, to having some supply diversification there. But what about the rest of the commercial sector? What about the rest of industry, which is probably 95-plus percent of rare earth demand? And for most minerals, it’s going to be most of demand as well outside of a few specific things. But so then you the question of you already raised it. How do you get the commercial sector to play along?

And the first thing is you do not simply ask the whole of global industry to be patriotic to some grand cause and pay more for materials they’re used to getting for a certain price level, certain level of quality readily from China. Chinese export controls have certainly forced a shifting or diversification among corporates, but not enough to build out a complete replication of Chinese supply chains. Right? And so now you have a situation where the way you build out these supply chains basically is through a combination of governments giving grants and loans at very preferential rates, governments guaranteeing offtake, governments giving other tax concessions, et cetera, and governments trying to connect the dots between actors. So for example, if you have a you know, French metals expert or UK, [for] less common metals, of, you know, these niche players that somehow survived the global migration of supply chains to China, then you pair that with say, an American rare earths company and they can start to build that vertical supply chain. That’s kind of what the companies are doing. They’re doing it with government support. But that works in very narrow commercial cases. It does not work as a general all encompassing, let’s all band together kind of approach. And the reason is, it’s really hard to make the commercial cases.

Cory Combs (19:29)

And the government has to basically backstop all of it. And so the government, there’s no government, even all governments are not going to backstop most of the world’s commercial industrial demand for most of these minerals. Right. What you can do is narrowly target - hey, the Pentagon is going to offtake enough critical mineral, enough rare earths from Mountain Pass to supply military demand. That’s great. Doesn’t change the rest of the market, right. And be asked to do the rest, but there’s still a price premium.

How do you work that out? That’s a difficult issue. And the final piece I’ll say here, and I know there’s a lot of dimensions, I’m just trying to talk through some of the key pieces here so people can have their own mental model as they think through these issues. The more cooperation, the more cost sharing, more to the point that you can have, the better.

But you have multiple different dimensions of US engagement. There’s packed silica looking at the silicon supply chain all the way through chips. You have Forge, [which] is this effort to, it was the first kind of major effort to bring countries together, sign all these bilateral agreements. And this is, this is, know, what Representative Greer is talking about. He’s really building on that. Basically agreements to agree to work together, right? And then you have Project Vault, which is an effort to build a series of US stockpiles and basically a reserve management system. The core of all of those things, the premise is that we non-Chinese countries, we all need to work together. We have to band together in the face of this common threat. That is the US side. For the rest of the world, what they hear is the US, which is jointly responsible for the mess that everyone is in. To be very clear, the US policies are the catalyst to which the Chinese government was responding with export controls. It was predictable. It was publicly predicted.

And it was used by basically the US government decided it was worth it one way or another. This not a normative statement. I’m not saying I [don’t] have opinions, obviously, but I’m not saying it’s one side’s fault. Both were involved. Both are partly responsible. That is, that is just the factual basis of it. And you can kind of have your normative assessment on top of that. So for the rest of the world, when you go in and say, it’s their fault, we have to band together and you’re not kind of taking responsibility for one’s own part. It’s not just a political issue. It’s a practical one.

Cory Combs (21:46)

Can other governments trust that the US strategy won’t involve actions that screw them over again, even as they cooperate on these big investments. So that is a huge practical issue in question for them. So that is, yes, so that is just something that they have to figure out and the US needs to figure out its messaging in order to assure partners if it wants to work with them, especially because these investments don’t take two years to play out. They take a decade to play out and that’s even before payback.

Alan Leung (21:59)

Yep. And that leads to something that’s, as you were mapping out kind of the potential value chain, how this may work, the challenges we face, then becomes a very serious medium to long-term policy question relative to short-term viability. I think from the non-US Western ally perspective, is now an arguably, almost inarguably, a greater trust deficit.

Cory Combs (22:27)

Yes.

Alan Leung (22:40)

At the high level across most policy areas between the UK, NATO, other NATO allied states, Japan, Australia, and the like with the United States. Critical minerals and Project Vault and creating a buyer’s cartel, pulling together resources to try to bring some of the costs down to create a vertically integrated critical mineral supply chain. It feels like that’s at risk of just being lost in the mix of all the other potential policy areas where there is differences of policy or just frankly fault lines there. And what you’re articulating about how the consensus view from the market is around what they would need to actually stand up a vertically integrated supply chain that supports not just the US military, but also the militaries of Europe, Asian allies, et cetera, that requires sustained coordination, not just over two, five years, but 10, 15, 20 plus years. So the question then becomes, how viable really are these efforts and where are there promising signs anywhere really that there is enough traction here to potentially insulate it from the…

Cory Combs (23:46)

Exactly right.

Alan Leung (24:04)

…political, well, frankly, electoral cycles, you know, in the US, but also with in the various allied countries as well, where it seems in the US side of things, there seems to be a bipartisan consensus that this is a problem, that this needs to be fixed. And over- dependence and over-reliance on Chinese sources is probably not a good thing for US national interests and probably not a good thing for a lot of the allies as well. But therein lies the question is the US has that broad bipartisan consensus. But I don’t think we can say the same for some European countries and maybe some Asian countries as well, either by choice or out of necessity. And they see the geographic and political realities of where they are right now. In your perspective, what kind of policy do you see signs of potential policy guard rails in place to almost kind of safe, kind of put critical minerals to one side and say, [that] is a long-term project while we can let other types of policy areas, we’ll let those kind of play themselves out. But we all agree that this is a long-term challenge that we will continue to work together on, bring private sector engagement into it, provide the right kinds of subsidies and the sandbox really for them to fail, succeed, et cetera. What do you think is needed? And do you see signals or green shoots that there are gonna be these kinds of, that kind of political willpower in place to make at least some of these things happen?

Cory Combs (25:42)

Absolutely. It’s a rich, it’s a rich set of interconnected issues. We have the material, we have the financial, we have the tech and talent pool, and we have obviously geopolitics. We also have US government strategy at the core of this. And that’s where things get very directly tied to the electoral cycle. And I’m glad you raised it very explicitly. Sometimes we talk about US policy longevity and we should be much more direct about it. We’re talking about electoral cycles, as you said. And so the way I broke this down is just top line, there is progress. There absolutely is. In particular on the rare earths front, just because that’s been a specific focus of the US government, there has been a mass mobilization of resources. And I would say I have critiques of various ways that capital has been deployed. But it’s also, in some ways, you just get the money out the door and you start moving resources around and you start to build up whatever you can build up. And that’s kind of been the approach.

Now I’m to get to a deeper critique than that in a second. But credit where it’s due, the US government has managed to help support several rare earth companies in the US. And more importantly, they’ve kind of opened the scope and said not just, you know, not just we’re going to help American companies make American resources, blah, blah, blah, but also, you know, being much more open, especially this year, it’s by necessity, right, it’s overdue, but they have finally come around to allowing companies that receive US government support to work with other international partners.

So that’s not a subsidy to other countries or other countries’ companies, but it is an opening of the possibility space, I suppose, for actors to collaborate. And that’s important for other countries as well. And I want a case in point of something that works versus something that doesn’t. Lynas. If anyone has not heard the name Lynas, this is the company to know in terms of critical mental diversification. They, for a long time now, a long time relatively speaking, a couple years, been the only commercial producer or processor of heavy rare earths, which are what make permanent magnets perform at a high performance of magnets possible. They are the only non-Chinese entity able to produce quality heavy rare earth products. How do they do it? It’s a collaboration between an Australian company, Lynas, Malaysia, which has the processing facilities, and Japan, which is actively paying more than it would pay China, for specifically secure supply for its massive magnet industry. There’s a trilateral engagement where, back to the value chain piece, everyone has a different strategic and financial interest in that, and everyone’s interest is being met in a way that actually makes sense for that vertical to exist, right? From extraction to processing to actual send-off to magnets, the offtake there.

What the US policies have done so far, and where the progress has been made but is insufficient, is in boosting the supply side. Having companies, particularly in the Emirates, but also few others, several others now, bring up supply, bring capacity to produce things or to extract things out of the ground. Processing, very far behind. And the offtake is limited. So one of the key issues as you’re setting up a project, how do you turn your extracted product into something useful? That’s processing. And then who buys the stuff? And right now it’s mostly governments or question mark. Now that’s OK for a little while because it can take a couple of years for a lot of these investments to really be built. But that’s got to be figured out sooner than later. Otherwise, these things all go kaput the moment the government stops directly kind of backstopping everything, which will be relatively soon, just in terms of scale of cost.

The off-take side is still being worked out. And this is where the kind buyer’s club notion becomes really important. If everyone can agree that they will buy, basically create demand for non-Chinese sources, well, your demand side goes up, And so you can afford to charge a different price point. But that, again, is not something that’s... we haven’t seen much progress toward that. And I think the reason is largely that trust deficit. And it’s not just a, “I like the president,” this isn’t that level of politics. It’s a, “will US policy support these investments long enough to be successful, to scale up and reduce the cost curve to something manageable?” Will the US, and this is a critical one for Project Vault. Project Vault is very directly asking allies and other strategic partners to send into US stockpiles, US managed stockpiles on US soil of scarce critical minerals that can either go to the US for safekeeping or go directly to industry that needs it today. If you were a foreign government, what would the enticement have to be for you to send scarce supply away from your own industry to a stockpile, especially if you’re not confident that the US would use that stockpile and release reserves in your interest and not just its own? So that is a practical question that is politically and geopolitically driven.

That’s where I progress has not really been made, kind of making those guarantees and assurances. Certainly it is something that can be assured. The US has managed strategic reserves in the past that benefit the world. But right now, that trust gap is the policy in place, it’s the strategy in place. And I would, the deeper critique, I’m going to circle back to the top real quick. There are a couple ways to manage the supply chain crises. Not Iran, right? That’s well, actually, you know, I’m gonna include Iran. There’s a couple ways to manage these geopolitically driven supply chain crises, namely, policies that Beijing uses antagonistic and therefore comes back with export controls to defend its interests as it sees them attack on Iran, Iran closes Hormuz predictably, now you have a crisis, right? These decisions, there are two options. One is you reduce your dependency, ideally for the action that creates the crisis, right? Which did not happen.

Or, and this is where both China and Iran have basically tried to impose costs to certain strategic actions, or you don’t take the action. And so in the case of China, the big conversations around, well, should the US bother trying to continue with export control policies around tech? Those are 90, maybe 80%, but certainly the majority of what has provoked most of China’s export controls, with the exception of the BIS affiliates rule, need to go into that right now. But again, a very predictable, it directly attacked China’s economic upgrading interest, which for the 15th Five Year Plan are the central focus. China’s economic upgrading strategy is the paramount focus right now. And anything that attacks that, it’s going to respond. So either you have the choice to try to mitigate your dependencies before a usually somewhat, at least somewhat predictable response, or you take a different action that won’t provoke that response.

For lot of allies, I think the question is, does the US understand the trade-offs of its own strategic decisions? And is it willing to the costs or just ignorant of the costs? Because if it’s willing to [bear] the costs, there’s at least a narrow pathway of maybe we partners can work with the US to strategize beforehand, you know, kind of steel ourselves, prepare. But if the US is not taking this in what we really call a strategic manner, that’s just a threat. That’s just a risk that is very difficult to mitigate.

And so that, think, is the deeper critique I have of what is the trade-off assessment, the cost-benefit analysis, if you will, is it being taken seriously at the level of the White House? That’s the question that has to be answered to really meaningfully give assurances to actors that the US wants to partner with.

Alan Leung (33:02)

And that’s a nice pivot to talking about what China is learning from the Iran war and how it views the different policy areas where it’s actively engaged with United States on of the export controls being really key to that. So my thought on that, and you’ve began to allude to it in your responses now, is that China has realized that they also have a bit more leverage now than they used to in imposing costs or changing the cost calculations of the US’s allies in terms of their policy behavior, whether they want to continue to be more on the American side for a specific type of policy action or be somewhat more neutral or continue in this, whether it’s supply chain, trade flows, capital investments, et cetera, be more aligned with behaviors that at least don’t get in the way of what Beijing believes is their strategic imperative. So my question to you is, think one, you know, what other lessons do you think in real time Beijing is learning right now from the Iran war as it relates to supply chain? Do you think that what they’re seeing right now is validating a lot of their behavior and thinking long-term thinking, stockpiling strategies, export controls, ramping up their own sanctions slash counter sanctions types of toolkits. And I think one of the things that I wrote about in the Securing our Climate newsletter is that one of the biggest challenges out of the Iran war is really what happens to the Southeast Asian countries who have not invested in the infrastructure or have the capital reserves and the relationships to outbid the next buyer for the remaining oil and gas supplies on the market. So as a result, they’re proverbially left a little higher and drier than the next country. So really two questions. What are they learning? Does China see an opportunity there to potentially leverage the outcome of Iran war to maybe change some of the geostrategic equations in places like Southeast Asia, where it is a very key long-term priority for them to remain the regional leader.

Cory Combs (35:23)

Yeah, it’s a very rich set of questions. When it comes to, I mean, I think right now, honestly, there’s a lot of focus on crisis management. So I think a lot of the lessons will be very operational for China. So for example, and there’s one policy in particular that kind of, I think you’re absolutely right in terms of direction of, China’s, Beijing’s response, I say Beijing is a central government strategy, but I’m not talking about corporate interests in China, et cetera. But the central government strategy toward Southeast Asia certainly wants to be, we shouldn’t think of it in terms of spheres of influence in this kind of US Western mindset, but certainly there is an analog to be made there with China, Southeast Asia. But at the same time, China has made very clear that it will not be the buffer for its partners. It’s curbed exports of refined petroleum products specifically to keep them at home. That does not help allies, and there were partners in Southeast Asia or elsewhere. And so think Beijing has been very clear that its interests come first, right? And it will secure them, and then it will help its friends, and then the rest of the world can have whatever’s left. That’s kind of the process I see. So I think that in the short term does cut a little bit into the engagement in Southeast Asia.

Cory Combs (36:42)

At same time, I think part of what’s been challenging for China is that it spent several years since the gallium and germanium export controls in mid 2023, up until really October 9th of 2025, trying to signal to the US, if you take certain actions, there are certain costs. It’s basically trying to put a clear strategic cost on certain US actions. And the US clearly did not get the memo or did not care or the cost wasn’t high enough. One of the three. And maybe Beijing has views on which one. We don’t know. That’s kind of trying to mind read. But one of those three options is the case and, whichever it is, it wasn’t working until October 9th. And then you see basically, think the lesson from that, and then we’ll get the lesson of Iran. I think the lesson from October 9th, which for, for listeners who not familiar was when the, when, when China had responded to the US BIS affiliates rule, which basically would have sanctions somewhere between 15 and 20,000 Chinese companies, incidentally, basically. China responded with six different export control related policies that dramatically expanded the scope, dramatically escalated the scope in multiple modes of retaliation. Basically, dramatically increased the cost of doing that compared to its prior export controls. The US backed down. The lesson from October 9th was if you push hard enough, you can get the US to back down. The US undid that policy, extremely rare for the US to undo a policy like that.

Cory Combs (38:02)

The lesson from Iran, I think, is that the US still does not have a very forward looking assessment. You cannot threaten a cost and then the US holds back from an action because of the cost that will come. The US is only responding right now to costs already imposed. So the closure of Hormuz was not surprising. The closure of Hormuz, the impacts have been obviously the dynamics that are hard to map out in advance. But realistically, what is Iran’s leverage? It’s the strait. So of course they’re going to use what leverage they have. That part is not rocket science. The exact price dynamics, that’s rocket science, right? But the basic facts are not. And it reinforces that the U.S. is acting first, dealing with the consequences later. And so China has to adapt that playbook. It cannot just have forward-looking threats. That works with the EU. They can negotiate and say, if you do these particular tariffs, China will respond and you can anticipate the way we Beijing might respond, right? And you can kind of pre-negotiate, I suppose, on pre-crisis. The US does not seem to operate that way. And I think Iran is another example of that at this stage. will also note, I’m just jumping back real quick, something I should have mentioned.

When we come to US strategy, when we come to US diversification, I think one of the big differences between the US and China right now is that the US diversification approach doesn’t have a particularly clear goal in mind, or benchmark or success. And there’s no there’s no win condition, right? For China, there is. And I think for China, when it comes to supply chains, the bottom line is, Beijing wants to make sure that its value creating downstream industries have whatever they need. Like, there’s a lot of complexity to policy, don’t get me wrong. But when you really boil it down, that’s what’s happening. Beijing isn’t investing in all these supplies, because it makes them money. They’re investing in it, so that other industries downstream can create value using those inputs, right?

The US is currently on the path of we need to diversify, cool, but to what extent? Do you need 50 % non-Chinese supply, 100 % non-Chinese supply? Who’s gonna use it? A lot of the issue, the US didn’t buy sulfuric acid in large quantities. didn’t buy the rare earth oxides or the rare earth metals. What it bought was motors, right? And so you have 15 steps in the supply chain between these upstream components and what the US actually buys. So now the US is like, let’s produce all these things that are many, many, many stages of production before the thing we actually need. What do we do with it? How much do we need? That’s not particularly clear. For China, it’s always been quite clear what they’re trying to do. And I think that that is really important in terms of diversification, in terms of how you’re dealing with your, like how you structure the mechanisms for every type of disruption from sulfuric acid to metals and minerals. You need to know exactly what you’re aiming for.

And I think the US is still figuring that. It’s going to figure that out. But I think it’s just in the middle of that process. And I think another thing that China has learned is the fact that the US doesn’t have a clear win condition or kind of victory condition here.

Alan Leung (41:05)

And I think that ties into the final topic that I want to cover today, which relates to your last point around policy clarity from China versus the lack thereof from the United States. The United States doesn’t have, as you say, a win position. Maybe there are semblance of a lose position, but that doesn’t create policy. That’s not what you ⁓ would put any kind of solid policy foundation on. Now, if we contrast that with a lot of the media commentary, especially in the first couple of weeks of the Iran war, and especially after Hormuz got shut down, I guess for the first time, I think we’re in our third and a half iteration of the Hormuz being closed, is that…

Cory Combs (41:50)

I was going say three or four. don’t know.

Alan Leung (41:52)

Third or fourth, I’ve lost count because it’s open, it’s closed.

Cory Combs (41:53)

Yeah. Right, just cyclical.

Alan Leung (41:58)

…the sesame is either open or closed or half open. And so a lot of commentary from folks in the sustainability and the energy transition space saying that this war is an opportunity to accelerate the energy transition. Now, do you agree with that argument? I feel like with some of the things we’ve discussed earlier around vertically integrated supply chains, around pricing, around the difficulty in mobilizing private investment to help create and sustain these moats It feels like that’s not an A to B or very linear conclusion to draw. And on top of that, I wonder because of the unit economics and the challenges thereof, whether that actually creates some very odd, but potentially odd policy outcomes where in some jurisdictions they may go backwards on the energy transition at least for a period of time.

I wanted to ask you as maybe a final broad question is, you agree with that more armed conflict in places where oil comes out of ground means that the energy transition is accelerated? Maybe it’s a question about for whom. Do you think you’re going to see policy momentum in Europe, Asia, maybe even the US, ⁓ towards electrification, EVs, batteries, and so forth. So yeah, as a final question, I’m curious to hear how you feel about that argument.

Cory Combs (43:18)

Yeah, I think there’s first of all, this is usually true, but it’s especially true here. There is a lot of room for genuine debate and, and, and disagreement here. I think a large part of it depends on, on where specifically you’re coming from, in terms of your, your prior is about how government works. But many other things, technical things besides. So my view, which I do not pretend is gospel, um, I do think it’s directionally accurate in the medium to long term that issues like this just throw into even sharper relief than was already the case that oil and gas is just not security for most of the world most of the time. It can be part of a secure energy mix. As much as I would love to have 100 % renewables, but the only secure thing there is, there is, you know, a lot of industrial arguments for some supply, right? And diversification is key and oil and gas can be part of that mix, whether I like it or not, given our current industrial structures, right? Which again can change. But right now, that’s going to be the case for a while.

But at the same time, oil and gas is a day in, day out risk vector. If a shipping vessel gets the way laid by anything, if there’s a hurricane, right? It’s a day in, day out, right? Prices can change immediately. Solar panels, I hear a lot about this, you we don’t want to swap dependency from oil to Chinese solar panels. The reality is you buy a solar panel, at worst you have a decade, and if you take care of it, 15 plus years of supply. That is not the same type of dependency. It should be very clear on the equipment side. And when it comes to software, just do the software at home, right? Just get the hardware, separate the software. This is a manageable set of risks. All of the national security risks, risk discussions around Chinese supply chains, I think, tend to be either, they’re genuine in many cases, but dramatically overstated, with an underappreciation for how mitigatable those risks are, and also fundamentally mischaracterize the nature of the risk, in my view, in many cases of particular conversations I’m thinking about that I’ve had with various governments and policymakers. So yeah, I think there’s absolutely a very strong argument, and Iran just makes the argument even more salient, that a massive increase in the amount of renewables used in everyone’s energy mix is helpful, is economical, is strategically important.

That is the direction. Now the problem is in the short term. I don’t think that’s going to happen. And a few reasons. One is just we’re in crisis mode. You have so many different dynamics. Right now, everyone’s just trying to secure supply. The cost of energy is up everywhere just because of the disruptions. And so as the cost of energy is up, that means the cost of processing, the cost of metals making, the cost of actually building out new capacity for renewables and everything. It’s all going up and also everyone’s extremely worried about new supply chain dependencies, which include China.

And again, back to my point, I think the risk calculus is biased in an unhelpful direction there, but it is very material, it’s very real. there’s a phrase used in a slightly different context, but it certainly applies here strategically in terms of strategic logic. The EU saying, we’re looking to reduce dependencies, not swap dependencies, right? They’re not looking to go from, you know, this is usually in the case of critical minerals, we’re not looking to go from, you know, dependence on China for minerals to dependence on the US for minerals, right? They’re also not looking for to go from dependence on Russia for gas, right? Imports to dependence on China for, you know, its clean tech. But again, fundamentally different types of dependence. But I think in the short term, the price crisis, the cost of actually bringing on new supply without creating new dependencies. It’s a political issue as much or more than a financial issue.

And I just want to throw, you know, kind of a historical analog into this. There are, there are dependencies that people are comfortable with, dependencies people are not comfortable with. There have been for years, many, many years, around the degree to which the US and others buy Chinese steel. Why is that so important? Well, because steel and rubber, basically, and oil are the main inputs to a war, to your war fighting capabilities. So the military side has always been concerned about the amount of steel. But you don’t see a World War II-style mass mobilization campaign to bring on new US steelmaking, right? There’s the jobs argument and everything. But you do not see, and you have not seen, any efforts comparable to the US building out rare earths, right? And to be fair, so it’s a different industry, which takes a few projects for earths and many, many dozens of projects for steel. But you get the point. That was a strategic vulnerability that we’re willing to live with because the US can produce just enough for military and the rest of the commercial sector. You know what? Fine. We don’t think China’s going to weaponize steel or whatever, or we just don’t think the risk is enough to invest in. So that was a dependence that collectively the US tolerates. Most of the world tolerates. What is the difference between that and solar panels? And I think the answer is largely it’s newer, it’s geopolitical, it’s related to energy, but frankly, steel is related to critical infrastructure.

So a lot of these arguments that are being used for national security apply in the case of clean energy. They don’t seem to apply in things that we’ve just gotten used to. Right. So just want to point out that there are disanalogies, there are plenty of differences, steel and solar panels are not the same thing, but the strategic logic used to justify not going to renewables tend to pretty closely map to arguments you could absolutely apply to things that we’re comfortable with. And I just really want to press governments, the US and others, what would it take to live in a world where maybe not the vanguard best technology, but the tier two “good enough” clean energy and batteries, not software, just hardware, what does it take for those to move into the category of just commodities that we’ll get from the lowest price, right? And yes, having procurement to make sure it’s not 100 % from China, because that’s just risky from a basic macroeconomic perspective, right? You don’t want all of your supply coming from any one source. Maybe there’s a flood or something, right? But what does it take to move that into a different category of consideration like a normal commodity, right? Where you can balance as opposed to completely decouple. And I think that is in financial interest. I think it’s an economic interest, different things. I think it’s a strategic interest. It’s just not currently in short term political interest. What does it take to change that calculus? That’s the question I have.

Alan Leung (49:45)

Yeah, and Cory, and just to wrap up, think that’s really important, and I agree 100%, really important, kind of nuanced and detailed take about what really does it mean to have a secure supply and who really needs it? And also, is that absolutely necessary on where the rest of the market or rest of society can live with good enough? So, to me, that reminds me of everything from screening criteria for certain kinds of investments based on who’s going to be the end user to various types of quality standards about what’s good enough, right? A solar panel is probably a little bit low tech and some of the other things. So what can different countries live with? And I think that’s going to be an interesting space to watch from a policy perspective, but also from like a regulatory perspective in terms of the, what does that look like for the U.S.?

Alan Leung (50:37)

And that’s probably going look a lot different from the UK or Italy or Finland. That’s going look very, very different. So to try to balance that with, say, buyer’s pools and funding pools is going to be very dynamic to, say, the least. So definitely an area we’re going to definitely keep watching.

I think we’re at time today, Cory. So thanks very much for joining the podcast. But before we go, is there anything that you’d the audience to know about what you’re working on? And maybe what’s coming down the pipeline on your end or which review.

Cory Combs (51:10)

Yeah, absolutely. So for those unfamiliar, Trivium is a China-focused research consultancy. Most of our teams are in China. I’m currently between Beijing, DC, and I’m briefly in California for little bit. We engage with, basically we have the government side. And that’s global. It’s not a US-aligned association. And we have the commercial and investor groups. So if you’re interested in any of these topics, please feel free to get in touch. Happy to have initial conversations. No problem there.

In terms of what I’m working on day in day out, so we have two things to flag. A lot of what my team is working on day in and day out is the involution issues within China. So basically the question is, who’s going to survive the consolidation cycle of EVs, batteries, solar panels, wind turbines, electrolyzers, all of these things, the emerging green hydrogen space, is now a priority, making Shanghai the global green fueling hub. A refueling hub is a thing trying to manufacture that industry basically out of thin air. That’s a policy priority this year. What’s going to happen? Who gets out of, who wins out of that? And what are the implications for business and for government? That is one of the big pieces we’re working on right now. And then my personal time is largely spent going around talking about minerals, obviously. And so if there are vulnerabilities there, we’re happy to talk about around what supply chains really mean for you. That’s at a government level, at a business chamber level, and at a corporate level. So plenty of discussions to be had there.

Alan, it’s been an absolute pleasure to be able to take a step back. Usually day in, day out, we’re in the weeds. We’re like, OK, where does this particular form of indium phosphide go? Where is it coming from? And what do do about it? So it’s really nice to able to step back and look at the bigger picture with you. And again, thanks for all the work you’re doing on this space. It’s terrific.

Alan Leung (52:52)

Thanks again for having us on the podcast, Cory. So that wraps up another episode. I’m your host, Alan Leung. And if you haven’t subscribed yet, go to Substack, look for Securing Our Climate, and look for the different subscription options. So with that, thanks again, and see you on the next podcast.

The noises from global financial regulators on geopolitics are getting louder and clearer: they demand more from businesses to show how they proactively protecting themselves and their customers from the impacts of war, supply chain disruptions, cyberattacks, energy insecurity, and more.

There are dozens of regulators, all moving at different speeds and tracking what they’re doing and where new requirements may be on the horizon can be daunting for risk, compliance, legal, government affairs, resilience security leaders. In the last few months alone:

• Australia’s APRA has launched a full-bore works programme, linked up with their operational resilience uplift (CPS 230)

• The UK’s PRA is planning to include geopolitical risk as a key area of focus for its 2026-2027 agenda, alongside climate risk modelling and risks to private credit markets.

• The ECB is planning to conduct a reverse stress test on 110 major banks this year, where it sets a defined geopolitical risk outcome and challenges banks to define scenarios and conditions where that outcome may materialise.

The Geopolitical Risk Regulatory Tracker, updated monthly, does just this. It provides:

• A description of how 22 major financial regulators are approaching geopolitical risk (or not)

• Their stages of developing guidance, policy and enforcement mechanisms

• A scoring on the criticality of needing to address a regulator’s needs

• A monthly recap of any noteworthy changes to their positions

• A deeper case study into the EU’s DORA and how it is hardwired to address geopolitical risks

View a sample of the tracker below. If you have a need on how your business could be exposed, subscribe today to get access.

Geopolitical Risk Regulatory Tracker April 2026 Preview TK Strategies

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Hi folks!

In this edition, I want to take another zoom out from the wars in Iran and Ukraine, and the slow burn over Cuba. But only to 10,000 feet. With all this volatility, what does it mean for conducting geopolitical risk analysis and for those whose responsibility is to ensure market stability, what are the opportunities and risks of regulating this space.

We’re talking regulators, specifically the prudential ones.

Why are regulators worried about geopolitical risk?

Regulators are concerned about mainly three things: 1) impacts on financial markets; 2) impacts on the real economy - how it impacts trade, supply chains, and downwind impacts on corporate and retail consumer behaviour, credit portfolios; and 3) impacts on the security and safety of regulated entities and the financial system. Their role, thus is inherently linked to national and bloc (in the case of the EU) security. Events like the Iran war have multiple risk transmission channels into the financial system, ranging from the safety of key personnel and data centres, to disruption to trade flows and cyberattacks of critical infrastructure.

But in spite of the awareness of the second and third order effects of geopolitical volatility, regulatory behaviour varies widely in their maturity. Many have simply cited the risk as a concern but no further call to actions. Geopolitics may not always be explicitly mentioned but more often embedded.

Even before the current crisis, global regulators have been gradually signalling their interest, and action in a few cases, to get assurance that regulated entities - banks, asset managers, pension funds, insurers, etc - are a) seriously thinking about geopolitical risk and its impacts, b) taking meaningful steps to manage the risk and c) being able to convincingly demonstrate that mitigation to the regulators.

Tracking the Regulators

So we know that this is going to be a rapidly evolving space, which is both a risk and opportunity for security, intelligence, and enterprise risk professionals alike. And it can be tough keeping track of developments and assessing where new requirements may be on the horizon.

I have created a tracker of how the regulators are evolving their thinking and actions. It includes:

• A description of how 22 major financial regulators are approaching geopolitical risk (or not)

• Their stages of developing guidance, policy and enforcement mechanisms

• A scoring on the criticality of needing to address a regulator’s needs

• A monthly recap of any noteworthy changes to their positions

• A deeper case study into the EU’s DORA and how it is hardwired to address geopolitical risks

You can view sample of the tracker here.

Geopolitical Risk Regulatory Tracker April 2026 Preview TK Strategies

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For the full contents in an interactive format + downloadable PDF, updated monthly, subscribe today to get access to the link in the next post.

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In summary, here’s what I found:

• Almost all the big boys are ostensibly worried. Even if a works programme isn’t happening today, chances are we’ll see more in the coming 18-24 months as geopolitical risk becomes embedded as a global risk premium across capital markets.

• While they may not be geopolitical experts themselves - and it’s clear the “politics and security” bench within most regulators is shallow - they are already connecting it with already-regulated areas they know and love such as market risk, credit risk, cyber, operational resilience, anti-bribery and corruption and sanctions. Not just at the risk level, but also over governance and reporting.

• Only an intrepid few are taking the step from information gathering and advising to setting rules with timelines for enforcement, with Australia being the global leader along with the likes of the ECB (geopolitical risk stress testing) and the UK’s PRA. Europe and perhaps some of the Asian regulators could follow, especially if the second and third order impacts of market volatility and energy insecurity seriously damage economic growth in their regions.

• Building out capabilities for more sophisticated horizon scanning, stress testing and scenario modelling, governance and AI explainability are going to be key to the journey to both effective compliance AND good risk outcomes.

• There are lessons learned to be had from how cyber, privacy and sustainability issues are treated by regulators to date.

In the following sections, I cover in greater detail how the EU and Australia are leading the pack, what their regulatory priorities mean for which aspects of geopolitical risk management will be most scrutinised, and a look ahead to where the form of regulation may evolve:

The ties that bind

While binding rules explicitly for geopolitical risk is not yet present in most jurisdictions, links are emerging them with existing regimes which do have binding rules and enforcement, such as the EU’s Digital Operations Resilience Act, or DORA, which came into full effect in January 2025. Financial entities and key third party suppliers are compelled to strengthen their information security and resilience against cyber attacks. It’s the most comprehensive info / digital security and resilience regulation out there, and calls for strict frameworks for ICT risk management, incident reporting, testing and simulations, as well as oversight frameworks for key suppliers of the financial services industry like cloud providers. For banks, being able to build and demonstrate DORA compliance is now foundational to business operational resilience and broader enterprise risk management.

Closely related is NIS2 Directive, another key piece of EU regulation which came into force in 2023 and focused on strengthening cybersecurity across organisations in 18 essential sectors. The directive sets essential requirements across risk-based approaches to network security, third party risk management, incident reporting, key testing, managing vulnerabilities, encryption and access management. Each country is responsible for pushing through related legislation with fairly severe fines for noncompliance.

These regulatory mechanisms is one of the most fertile grounds for compliance-related geopolitical risk work. Some of the kinds of questions that are already asked / demanded:

• How do geopolitical risk events create or impact known or new vulnerabilities to enterprise information security, and what types of critical assets are especially exposed?

• Are there bottlenecks or key dependency risks (e.g. geographical) on critical third parties e.g. payments, cloud services, telecommunications, payroll, trading? Are they vulnerable to sanctions or export control regimes?

• Is the monitoring and analysis of state-sponsored threat actors overlaid and integrated with geopolitical risk analysis? Is this reflected in required penetration testing, in line with the TIBER-EU framework?

• Are critical functions carried out in geographies with an elevated risk of disruption from geopolitical risk events (e.g. running key settlements out of Dubai)?

• Where does threat intelligence collection sit? Does threat research and hunting account for geopolitical risk actors? How does capability, process and governance link up cyber, physical and other risk intelligence teams?

• Is the organisation’s key risk teams connected with their counterparts at key suppliers? For instance, does your intel team know the intel team at AWS?

• How does geopolitical risk events a) create or impact known or new vulnerabilities to enterprise infosec resilience, b) what types of critical assets are particularly exposed, c) what mitigations are taken, both technical and non-technical (e.g. people and process)

• More enforcement and scrutiny over scenario planning, stress testing, assumptions. Portfolio exposures, impact to clients, liquidity and capital reserve positions.

• How are testing scenarios and parameters informed?

• Do key contractual provisions with third party providers allow for geographical resilience? Is there n+1 / n+x resilience in providers, and how is that diversification determined?

Aussies in the lead

Australia has a mature financial services ecosystem but the broader economy is vulnerable to volatility in commodities, trade flows and energy markets. It is also geographically isolated, with poorer digital infrastructure connectivity to other global financial hubs. It is perhaps not overly surprisingly that its prudential regulator, APRA, has come out of the stables with the clearest guidance last November, requesting explicit geopolitical risk management frameworks, governance and reporting which “connect the dots” with other existing risk functions. They’re particularly focused on

• Horizon scanning

• Payments systems resilience

• Greater focus on people risk

• Sanctions risk exposure and preparedness

• Maturity in crisis planning, management and response processes

• Connectivity with its new standard for operational risks (CPS230), which has parallels with DORA, but is more prescriptive around identifying and managing key business functions

This is new-ish territory for regulators at a time where globally regulators are paring back requirements, so it’s more than possible that other regulators are watching APRA’s progress, the responses from regulated entities, and adapt elements of their approach in their jurisdictions. APRA’s priorities point to a few areas of compliance and future enforcement, which regulated entities need to have upfront:

• The why: key objective(s) of geopolitical risk management for the organisation and how the work is done. A clear definition and description of the kinds of trends or events which are in-scope (action domains), how it fits into the organisation’s broader risk taxonomy and risk register. This may sound simple but actually would comprise significant work for many organisations.

• Intelligence capabilities to the fore: Mapping out risk transmission channels requires the right data and in-house subject matter expertise. Have in place and demonstrate effective workflows e.g. the intelligence analysis cycle, scenario planning development, crisis simulation exercises, are clear and easily explainable. This should also include where and how AI is used and human-in-the-loop. Critically, the intelligence part of the framework should clearly explain how collected data is turned into actionable reporting and informs risk + commercial decisions.

• Tweaks to data management and information classification: A clear data strategy for information gathering, vetting, analysis, and distribution. Because of the sensitive nature of some of this work - be it sources, methods or intended use / what question is it trying to answer - the data strategy should be aligned to how the organisation manages data privacy and classification.

• Security risk management frameworks and policies: they’d need to be much more connected to broader enterprise risk management frameworks as well as reputational risk management e.g. specialist teams or corporate affairs. Standards and best practices for travel security, staff accounting, evacuation and other emergency procedures now undergo greater scrutiny.

• Real, proactive enterprise risk management: because of the unpredictability of some events, there may be a tendency to focus on reactivity, which is a criticism of enterprise risk management philosophies to date. There’ll be a greater demand to demonstrate how organisations are on the front foot - from active engagement across disparate risk (security, cyber, credit, ops, ESG, ERM) and “front office” teams, to integrated horizon scanning and higher tempo of stress testing exercises

  

Looking over the horizon

Geopolitical risk governance requirements, I believe will start to reflect already other regulated risks covering market conduct, AI, cyber and sustainability. And it’s likely that there will be parallels between how those areas of governance and regulatory + board reporting evolve and how geopolitical risk reporting moves. Key areas:

• Managing geopolitical challenges across jurisdictions: when a crisis emerges, multiple regulators are eyeing an organisation’s behaviour. It’s key that decisions are made rapidly but also in a defensible manner. In the past, not every institution has done this well. For instance, if a company pulls its staff and key functions out of Dubai, has that choice considered reputational risks and regulatory issues with the local regulator? Or the views of the regulator where those staff and functions are relocated to? And how does market-entry work after things calm down and how would that be received locally? You can see how what may be a physical security decision is really far more complex, and costly (financially, operationally, reputationally) if planning, execution and messaging are not well managed. An integrated framework underpinned by solid relationships across security, corporate affairs, legal, compliance and sanctions teams would be essential to make good decisions that can withstand regulator and board scrutiny.

• Intelligence, data and AI: Most robust geopolitical risk intelligence tools have some form of LLM embedded into their product offerings. A growing number of organisations have built agentic AI workflows that determine which intelligence is shown on analyst / operator / leadership dashboards, or to build reporting. This creates an AI governance pillar in geopolitical risk management. If geopolitical risk data is also used for commercial applications e.g. commodities trading, then I can see the risk management evolution showing parallels to how sustainability and climate data is handled in the regulatory space: Guy Gresham, a financial services sustainability governance expert, points out that such data needs to demonstrate ROI while also having robust governance to meet regulatory requirements - articulating how data is turned into actionable intelligence, and vendor management become essential as the data is steadily embedded in frontline teams.

• Risk ownership: who should be involved in informing, making decisions and being responsible and accounting for managing the risk? There’s no consensus beyond “senior management and the Board,” and the answer to this will be unique to the organisation, driven as much by the motivations of those with social capital at the top, as it is by the technical needs or available resources. A RACI is a good start, but as AI becomes embedded in most tech and enterprise risk controls, clear articulation of who owns what in the geopolitical realm is absolutely essential when so much of the mitigation revolves around data management and AI-powered workflows. My former colleague and digital transformation leader Nilesh Khatri sees clear control, defined boundaries and the ability to intervene when things don’t go right, will be essential to demonstrate effective governance.

• Governance gaps: few organisations would overhaul how they work to adapt to geopolitical risk needs, but rather seek to either a) shoehorn it into existing functions, processes and roles, or b) make modest changes to team makeup, remits and workflows. Different models will emerge, largely driven by existing corporate culture (open door v siloed, flat v hierarchical, all voices welcome v deference to seniority). This creates gaps where risk transmission channels don’t align well with how risk teams are set up and work together. As governance expert Mimi Ajibadé points out, information is shaped at the point where roles converge but it’s often unclear who has what type of responsibility. Similarly, supply chain issues are often treated as operational, but risk governance lags - these types of disconnects between what the banking sector calls first and second lines of defence also creates gaps where rapid changes in risk can create problems in escalation and breaches.

• Is it compliance or managing risk? The more prescriptive the regulatory requirements, the more organisations will get pushed to one or two models. I’m not convinced there is one winning model to manage geopolitical risk inside a company, but there is a concern regulatory oversight creates path dependencies and incentives, such as reporting requirements that lead to new efforts of work to demonstrate compliance to the extent it dilutes proactive risk management. One key criticism of the sustainability field is how much resourcing has now gone into reporting versus “actual” sustainability work to deploy technologies, build talent, etc. So in managing geopolitical risk, we’ll probably see a mix of new roles created to supporting regulatory reporting while existing compliance, financial crime, credit, and cyber professionals have elements of geopolitical risk added to their board / committee reporting asks. They must be thrilled!

• Professionalisation: regulation brings standardisation, and standardisation brings greater professionalisation. Geopolitics and security largely lack this. Practitioners come from a wide range of backgrounds and there is no recognised accreditation of such. Most have a mix of academic and practical backgrounds (corporate risk, government / military / intelligence, politics, government affairs and policy). We may see industry associations like ASIS start to promote or elevate their standards so that these would be recognised as “passing mustard” by regulators and the broader financial services industry. This is probably a long way off but becomes a real prospect if more regulators pick up the geopolitical football.

Getting ahead

Learn from what’s come before: Geopolitical risk is yet another risk, so it pays to learn from the good, bad and ugly of how regulatory requirements (and responses) evolved with cybersecurity, privacy, AI etc as a roadmap of what (not) to do. Each company has their institutional memory around these already-regulated spaces, so it would be very surprising not to tap into that expertise as part of their uplift.

An empowered intel capability: this combines all of the above with where data resides, who and which capabilities turn it into intelligence, and how it gets to decisionmakers (or not). It’s not necessarily about having the “best” AI tools, but about how you get the right people in the room, connected with best practice and the tools needed to do the job, and empower them to have a voice at the decisionmaking tables. Moreover, the different centres of intel production should be integrated, if not at least joined up in capability so they are not operating, and reporting, in silos.

Do it for the culture: this is, I believe, the biggest determinant of success and doing better than the company across the street. Culture eats strategy for breakfast (no, Peter Drucker didn’t actually say this). Companies with the culture, talent and technology to proactively anticipate risk, plan ahead, respond rapidly at the operational level, and quickly deliver actionable intelligence to the senior-most decision-makers will be best placed to navigate risks successfully.

Ultimately, this requires a shift from organisational and management theory popular since the late 1990s to models more common in (former) small and medium tech firms like Netflix, which are agile, prize horizon scanning and getting the most of market insights, and willing to disrupt themselves.

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This morning, after 24 hours of Brent crude stabilising in the $90s because of news about the Trump administration’s multi-point ceasefire proposal, the Iranians inevitably rejected it, calling it illogical. Why?

• They are in control of what gets through the Hormuz and what doesn’t. Reports over the weekend suggest Tehran is charging generating upwards of US$2m for each passing vessel. That’s solid rentier behaviour for them.

• Their command and control structure is damaged but essentially intact. The war has only reinforced their resolve to win by playing defence. All they have to do is survive and outlast the US - financially and politically.

• They continue to demonstrate more than sufficient asymmetric aerial capability to hit regional targets, with Kuwait and Saudi Arabia taking the brunt of drone strikes over the past 48 hours.

By agreeing in part or whole to the US proposal, they lose significant political, military and economic leverage. In the past hour, Iran issued a counterproposal, setting its conditions:

• Complete stop of military activities from the US and Israel, and establishing “concrete mechanisms” such that “war is not reimposed” on Iran. This includes end of war on all fronts, including resistance groups.

• US and Israel to pay war damages and reparations

• And the kicker:

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• international recognition and guarantees that Iran has a “sovereign right to exercise authority” over Hormuz. This would be a radical change from pre-war realities, where 1) despite most of the strait falling under either Iran or Omani’s control, 2) the UN’s Convention on the Laws of the Sea ensures safe transit passage of commercial and military vessels.

And what happened next? Brent is back up over $100, and reports are emerging that the US is advancing preparations to enable its 82nd Airborne Division to deploy into region. Furthermore, the GCC, US, Israel, and most likely insurers, will not accept the final Iranian condition.

To me this condition is an “f-off” clause, clearly signalling Iran (and specifically, the IRGC and the political + clerical leadership it controls) calculates it will have a greater chance of survival and maintaining its strategic military capabilities by continuing to fight, versus prioritising diplomacy.

What does mean for the war’s trajectory?

• At least for the next week, it makes my Scenario A from the last post (both sides “roll the dice” and intensify the fighting, potentially including a US amphibious landing attempt on Iranian territory) more likely, to 55%. It means the “TACO” Scenario B falls to 45%, mainly because the US will now have fewer options to back out without looking weak, unless they escalate one notch further. This could see more expansive strikes on Iranian power and water infrastructure, inviting Iranian retaliation in the hopes Saudi, the UAE and other GCC states step up intelligence sharing, basing and other forms of military support for the US.

• Updating my post on the Iran war and water a couple of weeks ago, we should continue to be vigilant of the elevated risk to regional water security - via strikes on desalination, water treatment and pipelines + supporting power infrastructure. Virtually all of the GCC’s desalination plants are within Iranian or Houthi drone range and it is impossible for air defence systems to provide reliable, universal coverage across the physical footprint. This has major downwind impacts on not only water but power supply, data centres and overall economic and domestic activity. Multiple hits of water infrastructure (or any other form of critical infrastructure) across wide geographies will stretch repair and maintenance capabilities to or beyond the breaking point, meaning some assets could lay broken for weeks if not longer.

The folks who are formally responsible for overseeing and maintaining global financial stability - the central banks and prudential regulators - look at the whole mess laid out above, and they have much to say:

• The Bank of England is worried about how the war’s risks to heightened inflation and energy prices, and second or impacts on cost of business (fuel, power, transport, shipping and insurance etc). It didn’t change rates but were clear about quickly stepping in to manage inflation risks if needed. Observers are now split on whether central rates, where were steadily going down, while the market is newly pricing in four (!) rate hikes this year. The latter will have major consequences for the broader economy, including most forms of lending and the property market.

• In the eurozone, the ECB made similar noises, and is notably concerned about sustained disruption to oil and gas supplies. However, defence and infrastructure spend will help underpin continued economic growth. Europe is particularly vulnerable to oil and gas disruptions despite Norway being within its friendly zone, as a hostile Russia and an opportunistic US pose different challenges to secure hydrocarbon supplies.

• Australia’s RBA raised their rates by 25 points to 4.1%, citing similar concerns about the war, mapping Australia’s high susceptibility to commodity price shocks against a tightening labour. That the rate change was a split decision reflected the deep uncertainty from the Iran war and its fallout in the coming weeks and months.

• Another country highly susceptible to commodity shocks is Japan. Its central bank shares some concern about high oil prices leading to an overshooting of inflation targets.

• Singapore’s prudential regulator, MAS, is watching the war’s impacts on the domestic economy and the broader financial system. Singapore is a key global financial regulator as a major global financial and commodities trading hub.

It’s not hard to see this concern over geopolitical volatility cascading to their regulated entities - the banks and insurers. As we face potential new shocks, and the risk of medium-term impacts to inflation, borrowing rates, and consumer prices - the things that make the war “real” to many people far from the front lines, the scrutiny on how the people who hold our money are managing and mitigating the first, second and third order impacts of the Middle East war will rise in a way it has not for years. What kind of data are you using to anticipate shocks? Who is responsible for escalating and analysing impacts of everything from staff safety to liquidity of market positions and loan nonperformance rates? Are you pooling together all available resources within your organisation to problem solve? Do your C-suite and boards have the right information in a timely manner to make the right decisions for their shareholders, clients, staff and the public?

In upcoming editions, I’ll dive deeper into this and more around the so what and now what of the Iran war, as an example of not a shock event, but as a source of persistent geopolitical volatility::

• In finance: how regulators are (probably going to be) stepping up their game on supervising how banks and insurers are managing geopolitical risk

• For risk professionals: Three areas of immediate opportunity for risk managers to take gradual and radical action ahead of the “future Irans.”

• For investors of many shapes and sizes: Three immediate investment angles this presents for those seeking opportunities at the nexus of geopolitics, climate, security and defence

If these pique your interest, be sure to subscribe to get these future posts as soon as they are published! And if you want to support Securing our Climate, share it with your friends or on socials, or consider a paid subscription.

Stay safe out there

Alan

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I wasn’t planning to write more about Iran this week - I was actually drafting a longer piece about the longer term impacts of the war on how we do geopolitics - but the news today made me reconsider.

Earlier today (19 March), US president Donald Trump took to Truth Social to highlight how he did not know in advance of the air strikes on Iran’s South Pars gas fields - the world’s largest and insisted Israel won’t attack it further unless Iran decides to attack Qatar and other GCC states’ energy infrastructure. In turn, Israeli prime minister Binyamin Netanyahu remarked that only Israel took the initiative to hit South Pars.

What should we take from this? My current thoughts below.

There were likely misgivings from the US about Israeli intent and objectives on Iran predating the latest war. And how Trump came to the decision to back the strikes - whether you believe the official statements from the White House or the insinuations of departing NCTC chief Joe Kent - will probably emerge in memoirs, podcasts or TikTok lives in the coming months. But these misgivings are now becoming more public. To me, it appears the US is beginning to lay the groundwork to option itself an offramp to a deal - a deal which is amorphous at the moment. Two broad scenarios emerge. Neither are for the light hearted for those on the markets or corporate enterprise risk / strategy / scenario planning teams.

Scenario A: Roll the Dice (40%)

Buckle up for a more expansive war of indefinite length and more aspirational, but shifting goals, for which a common thread would be degrading the political and military elite in Iran sufficiently so that “someone” emerges with whom Trump can parlay with, Delcy-style. As each senior Iranian military and political position likely has multiple succession levels, the regime fancies its resilience even if chain of command, cross-functional coordination get more wobbly for a time. This is bad for the US (and a net good for Iran, Russia and China) because it fundamentally takes a US framing of how a weaker state would react to threats to regime change, and grafting it onto Iran. It’s hard to see how a figure would emerge in Iran who is a) willing to negotiate on American and Israeli terms and b) not become an immediate assassination by a wide range of actors.

There are a number of primary, secondary and tertiary fallouts:

Down/Bad:

• Even bigger shock to the oil market, as Saudi ramp up exports via the Red Sea, making it attractive for Iran and the Houthis to take some shots at the up to 11 mbpd at risk if the Saudis go “oilmaxxing” to Yanbu.

• Fertiliser supplies across South and Southeast Asia ahead of planting and rainy season form looming food security crises, electricity prices and uptime in places like Thailand which rely on Qatari LNG to power their grid, with knock-ons for domestic economic production, manufacturing, data centres.

• The additional demand on fiscal reserves to pay their way through energy insecurity will stress those most vulnerable to Middle East commodities imports, while facing already-high inflation, high debt-to-GDP levels and strained central bank reserves. Sub-Saharan Africa and Southeast Asia should be on guard.

• Insurers will continue to be very risk averse for Middle East maritime.

• Gulf real estate, but medium-term attractive for critical infrastructure and defence spend. Those countries can’t move, but they’ll adapt their economies and arm themselves to the teeth.

• Ukraine.

Up/Good:

• Defence stocks, most precious metals, USD, and other defensive assets.

• Green ammonia/hydrogen fertilisers - don’t require LNG as feedstock

• Renewable energy and batteries

• China, on Taiwan and APAC military balance of power

• Russian state coffers from higher oil and gas prices.

Scenario B: TACO Tuesday? (60%)

The offramp option, at present feels slightly more likely but it depends on which elements are on the table for the US, Iran, Israel and the Gulf to de-escalate. These elements could include (in no order of feasibility): limits to the Iranian ballistic missile programme, volume and level of enrichment of uranium, location and disposal of uranium and related equipment, inspections, land and maritime DMZs, drawdown and caps on Iranian forces present in certain regions, easing of sanctions, new elections with US-accepted candidates, prioritisation of American/Trump allied-corporate contracts for reconstruction in key sectors e.g. O&G, aviation, power, transport, digital. I believe this scenario is slightly likelier because of serious emerging domestic headwinds for Trump and his team, his keenness for a successful US-China summit this spring, and his past behaviour of pivoting quickly when faced with economic threats which he believes will impact voters in a direct, negative, visceral way.

That many of the above sound like a pipe dream or beyond is broadly reflective of a fundamental bipartisan misunderstanding in Washington of how Iran, and many weaker states, respond to severe external pressure. To borrow a football/soccer term, the Iranian regime is taking up a “low block” against the US and Israel. Its goal is regime survival - a low bar but it believes the US has a lower tolerance for costs than itself (the Pentagon is asking for $200bn in additional funding for Iran, after indicating it spent over $11bn in the first six days of the war). And they may be right: higher gas and fertiliser prices are already hitting the US and the expectation of steadily lower interest rates ahead of the US midterms has receded.

What could happen? We would hear indications of renewed talks e.g. in Oman or Vienna to identify renewed common ground for a ceasefire. If multiple ceasefires are deemed to hold by the warring parties (a BIG if), talks may progress to a longer term political settlement where many of the items above would be tabled. But as we’ve seen in past cycles of Iranian nuclear talks, they are NOT linear and carry the threat of renewed hostilities. And this process won’t move fast - months, at least.

The implications are not so immediately positive, because of the many sunk costs:

Down/Bad:

• Qatari LNG - major damage to sites like Ras Laffan will take months if not years to repair and return to full capacity; shut refineries which are otherwise intact may take over a month to come back online.

• Countries hit by supply shocks will be under pressure to find longer-term resilient alternatives which may not materialise before the next crisis. Perceptions of security of the GCC states have been shattered, which can impact investment attractiveness and credit ratings.

• And baseline global volatility and insecurity is going to resettle at a higher level: the Middle East may undergo a new arms race with nuclear enrichment mixed in?

• (For the West, at least) an emboldened Russia and China press their advantage against the US in their respective regions

• And the US may continue to pursue political coercion in new places (🇨🇺).

Up/Good:

• Oil and gas prices re-stabilise, but perhaps settling back at a higher price as talks drag and threats of renewed fighting persist.

• Bond, FX markets also calm down, and interest rate trajectories in some countries may be rosier again for borrowers.

• Markets may become less complacent now that the hypothetical Hormuz crisis has actually materialise, with damaging implications for global prices and energy security. This is a good thing if markets begin to better price in geopolitical volatility, as the fluctuations over the past three weeks have shown they have NOT been good at this.

• The EU would breathe a sigh of relief if a) this gives them greater optionality to rebuild gas reserves ahead of winter, b) returns the fiscal and political space to regional and Ukraine matters, c) threat to Red Sea traffic is reduced.

• Maybe fewer influencers and “bad expats” in Dubai won’t be such a bad thing for the locals. They’ll decamp to Ibiza or Bali.

—

Unfortunately, the Iranian people’s suffering continues under both scenarios, albeit under the second scenario many internally displaced citizens may be able to return home. We shouldn’t forget that the innocent lives harmed and lost forms the biggest unmitigated tragedy of this war. The traumas and consequences, for them, are going to be lifelong and multigenerational.

—

Hi folks! I want to say thank you for reading and supporting my work for the better part of the last four years. It’s been amazing to get your comments and feedback here and on LinkedIn / Bluesky and chat with some of you IRL about how important it is to invest in protecting what we care most about in a harsher, more volatile world. And it’s been wonderful to get feedback on how the posts have helped them approach climate risk in a new lens, informed their own analysis and how they’ve used it to advise commercial decision-making. That’s been a big motivation which has kept me going, watching the community of interested and engaged practitioners grow.

As you know, doing the research and analysis behind behind each post takes a significant amount of time, energy, and resources. To help sustain and deepen the work I’m doing, I’ve now introduced a paid subscription option.

If you’ve enjoyed reading this newsletter and would like to support it further, you can head to your subscription settings and choosing a payment level which works for you.

Here are some of the topics I’m planning to post in the coming weeks and months:

• How global financial regulators are going about overseeing geopolitical risk management

• The Venn diagram of security intelligence with climate intelligence

• Lessons from the Global South on good resilience practices that the Global North should adopt and invest in

• More expert interviews

• And more!

And if you’d like to learn more about how I could help you dive into and solve specific challenges or explore new opportunities, you can read more about that here, or get in touch at alan@tkstrat.net.

Your support helps me continue producing high-quality research and insights for this community.

Thanks again for being here!

Alan

As the Iran conflict enters a second full week, we are seeing reports of Iran damaging a desalination plant in Bahrain by Shahed drones, hours after Tehran accused the US of hitting its desalination plant on Qeshm Island near the Strait of Hormuz.

While much of the media focus has been on the impact to oil and gas production + flows, water should be far more concerning. As I wrote back in 2022, water underpins all human activity, and messing with water for military or political advantage is a tale as old as time. How countries value and (mis)manage water infrastructure, access and usage goes a long way towards water security in a crisis, natural or manmade.

For countries in the Gulf, this is a clear escalation and for some a potential red line. And as armed conflict is conducted in a world of harsher climate realities, we are likely to see the targeting of water infrastructure as part of either escalation or punishment to 1) degrade an adversary’s ability to fight 2) inflict material cost on the adversary by threatening the survivability of local communities and 3) damage the morale of the adversary’s civilian population. The fact that these intended impacts are aligning with elements of US/Israeli and Iranian calculus is telling - both sides are accepting of escalation to push the other side to accept political negotiations.

GCC desalination state of play

In the Gulf and Arabian Peninsula, most water is derived from desalination and underground aquifers. There are over 400 such facilities around the Persian Gulf. Only Saudi, Iran and Iraq can make direct use of underwater aquifers.

Read more

There has been SO so much ink spilled on Greenland already from many angles. Now that the dust has settled between Trump, Denmark and NATO for now, and the Munich Security Conference passed without more Greenland headlines, it’s a good time to think about the less heralded angles to the story and why the world will almost certainly return its gaze to the Arctic in the years ahead.

Where’s the nexus with the climate side of things?

• First, the obvious one: a warmer ocean. Sea ice reflectivity is weakened if not disappears entirely for long stretches. This means sunlight is absorbed and not reflected. The melting lowers water salinity, reducing its density near the surface. Because of the reduced ice coverage, strengthening the halocline, or the underwater boundary between fresher surface water and saltier water beneath, critical for the generation and perpetuation of deep ocean currents. There are multiple, complex feedback loops impacting this, but research and modelling suggest some relationship between the gradual increase in fresh water from the Arctic impacting North Atlantic currents (the AMOC). Major changes, or a collapse in the AMOC could have significant, medium and long term impacts to fishing and agricultural productivity on both sides of the North Atlantic and beyond - as one of many global impacts.

• Melting polar ice caps also means Greenland’s ice cap also accelerates its disappearance. Also negative contributor to the first bullet.

• Changes in salinity will impact a ship’s seaworthiness in the Arctic by impacting its buoyancy (saltier water is more buoyant). Arctic-grade vessels today may not be usable, or need expensive adjustments (e.g. materials, hull designs), to adapt to fresher Arctic seawater. This impacts everything from icebreakers and container ships to submarines and frigates. Aging vessels would particularly struggle with changing conditions especially if they are beyond their original service life (this is especially urgent for the US in the Arctic / Antarctic context).

• Permafrost melting rates increase, releasing large amounts of CO2 and methane - predominantly in Russia and Canada. This is hugely damaging to onshore infrastructure like gas pipelines, roads, not to mention habitats for entire ecosystems. A somewhat cynical medium-term outcome is the gradual increase of arable land for Russia and Canada, though whether the economic, social, environmental and political benefits outweigh the cost from physical climate risks is questionable at best.

• Broader changes to the High North environment, including increased runoff of ice caps / snowmelt and wildfires damaging ecosystems, accelerating ground heat absorption and accelerating positive heating feedback loops.

OK so what for Arctic security?

Two of the thought leaders in the climate security space, John Conger and Sherri Goodman, have commented on this topic in recent weeks. I encourage you to check them out, as well as Duncan Depledge from Loughborough University in the UK! Below are my thoughts:

• Military vessels operating in the Arctic may need refurbishments to operate in waters where changes in salinity create operational challenges

• More open sea lanes means greater capability for adversarial surface vessels to operate in wider ranges - in practice, the US, Russia and potentially China would seek to push freedom of navigation transits to assert de facto control of critical waters. This creates greater scope for near-misses and confrontations.

• More open sea lanes invites greater commercial shipping activity, particularly via the Bering Strait and the GIUK (Greenland-Iceland-UK) gap on either side of Svalbard. Shipping lanes and supporting port and communications infrastructure need to be in place and secured. These also invite greater military competition. Russia, already in control of half of the Arctic coastline, would seek to dominate control of most future shipping traffic.

• And to that effect, the changing environment opens up more mining and oil / gas exploration activity. Well, that’s going need to be secured too (see: Guyana).

• Norway’s ability to control Svalbard becomes more critical militarily for the US and NATO. Svalbard, via historical treaties, has a prominent Russian presence. Norway, pushing to develop Kirkenes port on its mainland, is under pressure to curtail Russian influence and manage the Chinese presence e.g. limit Svalbard access and influence on Kirkenes while welcoming commercial traffic to/from China.

  

• Melting permafrost sinks ground levels. Changing onshore environments may threaten the stability of onshore infrastructure and bases e.g. water systems, fuel storage, roads, concrete and metal structures etc. This could negatively impact force preparedness and uptime for early warning systems critical for missile detection. Much of US and Canadian Arctic military infrastructure has been underinvested; massive upgrades are needed to make them climate resilient and mission-ready in a more competitive region into mid-century.

• People living in the High North, such as Canada’s Inuit population, have faced decades of underinvestment and isolation - they are among the most vulnerable to the physical risks from new climate realities, threatening everything from traditional livelihood patterns to food and water security.

• For policymakers - revitalising the Arctic Council as the one-stop multilateral high level policymaker body, with greater remits to ensure environmental, economic and scientific research concerns have governance with teeth. That’s the first prize in my opinion to manage both the climate and geopolitical transitions the region is inevitably facing. Short of a radical US-Russian rapprochement where the Washington and Moscow properly split the Arctic into eastern and western hemispheres, second prize may be the US and NATO agreeing on how to securitise future commercial activity in the region. I see China as a potential “swing vote” largely dependent on a) if the US and China and find a more sustainable rapprochement and b) the durability of China-Russia ties. It’s probably unrealistic for China to be “denied” access to be Arctic, least of all from a commercial perspective. So there may be some space for policy engagement: for the US / NATO it would be seen as trying to pull China to be more “equidistant” policy-wise vis-a-vis Moscow on Arctic concerns.

• Second for policymakers: Canada is pushing on a C$1bn Arctic civilian-defence infrastructure fund. That’s commendable, but probably not nearly enough given military requirements and the added cost of logistics and delivery in harsh physical environments. Governments need to make make it easier for private capital - beyond defence-tech startups and their VC backers - to get their foot in the door to deploy capital while spreading risk out e.g. off balance sheets, export credit underwriting etc. This also needs to happen with projects focused on, or could benefit, Arctic security.

Where security, resilience and climate converge: “sustainable resilience”

I’ve done a bit of a deeper dive here but I’ll share some highlights:

• If you’re a player already in the defence space then doing more here is a no-brainer, plugging into RFIs and RFPs or existing contracts that support maintenance and growth in Arctic missions.

• Minerals: This is more of a medium-longer term prospect should the US and Denmark ultimately agree here - and there’s good political reasons to believe that down the line, US demand and EU energy transition and supply chain resilience imperatives will win out over longstanding mining prohibitions. Amanda van Dyke has written about the critical minerals issue specific to Greenland in much greater detail if you want to read more.

• Sensors - this is probably the most obvious one. Much more should be known from a climate science perspective about the changing Arctic. This requires sensors, many more of them. Deploying them requires cooperation across government, corporates, manufacturers and shipbuilders and academic research. A good example is Canada’s Dominion Dynamics, which has received VC backing to develop and deploy persistent drone-based sensor networks primed for Arctic conditions. Alaskan startup beadedcloud is another sensor maker doing interesting things geared for the High North. These can be used for both environmental and military C2ISR needs. Data collected would have tremendous scientific, policy and commercial value. On the latter, a range of users from data brokers, climate analytics firms, insurers, shipping, telecommunications, energy transport, to name a few, would find this useful.

• Undersea cables - this has been bandied about for years with multiple failed attempts for commercial or political reasons. Melting ice caps probably opens the door in the coming 5 years, with political tailwinds at least in the West, for existing projects like Far North Fiber and Polar Connect to be completed, with greater appetite for more from national security and digital players like Meta and Google seeking minimal latency between key data centre clusters. Technologies piggybacking on subsea cables like those deployed by Smart Cables could have interesting dual-use climate defence applications.

• Icebreakers - Even with melting ice caps, the Arctic isn’t expected to be ice free year round in entirety for some decades. Quickly building or refreshing fleets is getting harder: Finland has built 60% of the global icebreaker fleet and designed much of the remainder. Russia has the largest icebreaker fleet with over 100, with Canada second with around 50. The US has under 20 - only 3 polar icebreakers belong to the military (Coast Guard) with two more planned and being built in…Finland! China having its own docks. For the US and NATO allies, Finland and Canada are the only options. And shipbuilding leadtimes are lengthening given the record backlog of container vessel orders to shipyards, which implies new (non-Chinese built) vessels which are adaptable to a changing Arctic would be at best drip-fed well into the 2030s.

• Arctic ports - perhaps the chunkiest bit for fund managers and their LPs. Developing and operating ports is a model well known in the infrastructure world. Looking at existing global routes, Arctic ports like Nome, Kirkenes, East Iceland and Murmansk stand to benefit, while near-Arctic ports like Vladivostok, Halifax, Yokohama, Anchorage, Oslo and Seattle may see greater traffic. There also may be implications for volume and flow for major global ports like Ningbo / Yangshan, Rotterdam and Singapore. The challenge is, it’s hard to estimate if there are large enough projected additional demand to make development attractive enough for big investors. Cynically, the more the ice melts, the more viable Arctic sea lanes are…

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We are more than halfway into the first month of 2026 and is your hair turning grey(er) already? Or are you seeing more opportunities because of the volatility?

For me, that’s a yes to both! If you recall, back in November I spoke of opening time to help you and others in my network with burning problems or complex challenges across geopolitics, enterprise risk, resilience, defence and climate.

📊 A few figures underlie these challenges, and opportunities:

• This year’s World Economic Forum’s vaunted Global Risks Outlook highlighted that nearly 90% of global corporate and political leaders surveyed saw a more volatile short and medium-term future, dominated by geo-economic confrontation, armed conflict and worsening environmental events.

• Logistics giant DP World’s annual survey found 82% of surveyed corporates fear geopolitical risks’ impacts to supply chains but only 25% felt well prepared to respond to them.

• Key financial regulators like APRA (Australia), ESMA (EU), MAS (Singapore) are now very alive to geopolitical risks’ impacts on financial market stability, meaning heavier regulatory oversight of the banking sector in this realm. Regulatory regimes like DORA (cyber resilience), NIS2 (cybersecurity with a healthy dose of supply chain), CSRD (sustainability), and the EU AI Act shift into enforcement.

• A staggering US$224bn of losses occurred from natural disasters in 2025, with insurers covering only $108bn of it, according to a recent Munich Re study.

• Howden’s 2025 political risk insurance report found 51% of corporates survey had a political loss to investment in the past year, with the insurer expecting demand to rise further from a worldwide premium base of US$49bn.

• After decades of over-reliance on the US, Europe aims to spend up to EUR800bn in new defence spending by 2030, with one analysis projecting the European defence market growing sharply from USD183bn in 20205 to 235bn by 2030.

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Helping clients steer through these choppy waters is why I launched TK Strategies. Leveraging two decades of experience working across various levels of government, finance, security and thinktanks, I use industry best practice to solve for complex problems in enterprise risk, geopolitics, resilience and defence.

💡 TK Strategies can help you across several pillars:

• Turning risk into resilience for your organisation: building intelligence-driven frameworks which connect your key risk domains (operational, technology, geopolitical, sustainability etc) with ongoing monitoring, risk indicators, and response processes and controls.

• Proactive crisis and scenario planning: Design and facilitate workshops to explore high impact, plausible probability security, geopolitical and climate scenarios for your organisation. And building robust strategic risk management frameworks to set up your organisation to proactively manage these risks.

• Geopolitical opportunity mapping: Work with you to develop strategies that connect geopolitical risk with action domains: the “so what, now what” you need to translate risk to action or new investment opportunities. Examples include regulatory landscapes, location strategies, energy markets, supply chains.

• Build your own intelligence team: Design, advise and build out best-in-class, value-creating intelligence teams inside of your organisation across geopolitical, climate, insider, operational security, .

• Climate security risk assessment: Assess how climate impacts (e.g., extreme weather, resource constraints) could affect your operating environments, supply chains, people, or the stability in the markets you operate.

• Bespoke analysis: Deep-dive reports, white papers, or tailoured briefings that translate complex topics which I cover in this newsletter into actionable intelligence at all levels of an organisation, from C-suites to operational teams.

➡️ My approach is straightforward:

• No assumptions: I take time to listen to your needs to fully understand the scope of the problem, and potential solution(s).

• A pragmatic, intelligence-led approach to problem solving, using structured analytical techniques.

• Independence: I’ll provide honest feedback and an independent perspective. What you see is what you get.

• Transparency: if I’m unable to help you fully or there are better alternatives, I’ll point you towards them.

If you’re ready to move forward, schedule a time with me on Calendly or email me at alan@tkstrat.net.

It’s 2026! And we’re back with part two of the craft of doing geopolitics. In the last post I focused on people, culture, organisational structures and business models. Today I’m going to focus more on tech, including how my thoughts on how AI is going shift the dial on how we as intelligence and risk managers go about our work.

If you’re invested in the climate / enterprise risk / security spaces, I hope you read this too as I believe there are crossovers into those spaces, as disruptors and enablers.

Part of my highly non-peer reviewed assessment is driven by conversations with practitioners, startup founders and CEOs, investors, risk managers, industry consultants and thought leaders who I really rate like Greg Isenberg and Seth Godin. The rest is fuelled by my 20 years of experience across risk, intelligence, climate and geopolitics, and maybe a few glasses of vino tinto.

• Intelligence work is going to become agentic-AI heavy, where that isn’t already happening. There is too much data, too many requirements, too many geographies, targets of interest for existing capabilities to efficiently comb through to truly cover their organisational or client mandates.

• Analysts and intelligence leaders will be increasingly valued for their ability to build and manage agentic AI workflows. This will rapidly become a non-negotiable skillset; and having “proprietary” workflows could become part of an analyst’s professional calling card.

• The Internet as we know it will be increasingly flooded with synthetic data. Good LLMs and workflow solutions, especially for qualitative thematics like geopolitics, need particular vigilance and curation to safeguard their value to clients. We come to value good, “real” data to power our LLM and agents. There is a risk that LLM quality and usefulness dilutes as public models train on more recursively generated data.

• We’re all going to talk more about model limitations and drift, and use a suite of models from different developers versus relying on just one or two. Models follow a garbage in, garbage out model. They drift and degrade over time, requiring frequent fine tuning, reverting to older models or compelling the development of new ones. As AI-generated content grows as a proportion of all generated digital content, feedback loops mean that over-reliance on AI output going forward is going to look silly. Maybe not “AI slop,” but I wouldn’t put that in front of my execs!

• 🧑🏽‍🔧 🛠️ What’s going to be “AI-proofed” trades and roles?

  • Executive protection personnel - SOCs face significant automation vulnerability but VIPs still want human beings to physically protect them to FEEL protected. The risk to these highly personal roles is not so much AI but perceptions of risk from C-suites who hold the purse strings.

  • Senior analytical and risk management roles. People are needed to interpret the output of autonomous workflows and output to a) safeguard the enterprise and b) make sure stuff is actionable.

  • Auditors - it’s going to be a while yet before people feel remotely comfortable having autonomous workflows and models mark their own homework.

  • Security and data monitoring hardware technicians - so much of the data that is potentially actionable, proprietary or public, comes back to sensors. Whether it’s the Bluetooth access control panel at reception or the motion-sensor activated camera strapped to a mangrove in a conservation area, these things break and need fixing. Employees, wildlife, project managers, regulators and investors alike need these babies to keep working with minimal downtime.

  • AI model and workflow managers / specialists - most of us who drive cars don’t know how to diagnose, let alone fix all the problems with our machines. Similarly, we cannot all be LLM experts. Those who are experts, will stay around for a long time coming as the AI mechanics of the future.

• 🧽 Geopolitical risk is going to get absorbed into Enterprise Risk Management over time in many corporates, although many will continue to struggle to find and apply reliable, reportable data - and analytics.

  • This is where GRC solutions have a leg up for now. Companies like Navex and Auditboard with established proprietary platforms, workflows, taxonomies, and - quite critically - clients and capital. For many corporates - particularly in finance, it’ll be a path of less resistance over time to find a compliance-y type solution to embed geopolitical risk into established frameworks for internal risk assessments, controls and audits. What these firms need is subject matter expertise, and they’ll most likely make acquisitions to do so - like they have done with cyber and sustainability.

  • But over time, everyone could really think they are a geopolitical / climate / cyber / etc expert, because they’ll have the tools. If agentic AI really become democratised (free solutions get pretty damn good), then niche risk management solutions hyper-tailoured to specific needs may win out over all-in-one horizontal platforms on cost, off-the-shelf readiness and customer delight. This may create opportunities for bespoke consultancies to differentiate in a crowded market and at least maintain their client base.

  • Treating geopolitical risk as a type of enterprise risk would be like caging a wild animal. It’s a risk, not a compliance issue. But ERM and GRC solutions all support compliance and reporting requirements, which create path dependencies where risks are seen to be “managed” if they are in the system. As many of you know across the climate and security spaces, compliance does not mean risk management. When crises break, I would be concerned that these SaaS solutions would either over/undershoot the impacts or generate un-actionable insights for C-suites, without the suitable curation or leadership.

• 🗞️ News outlets and data sources could increasingly be agentic AI driven, with one or a very small team of people overseeing the operation. Or it may even be entirely autonomous - taking the Twitter news bots to the next level. This places new challenges for analysts to vet sources and determine how data is generated, collected and synthesised.

• Good SaaS agentic AI workflows in our space would need to be effectively perform at the level of a competent, proactive junior analyst. Easy to use interface (think drag and drop), informed by real expert and practitioner insights and case studies, capability to challenge user assumptions, and discern synthetic from “virgin” data.

• 🙋🏽‍♂️ If everyone has AI, then the differentiator is…you guessed it, people. But not everyone is going to make it. OK, so I believe generative AI is wonderful for basic research and some idea creation, and agentic AI is going to be transformative in levelling up the quality and volume of analyst output. Entry-level analyst and those whose roles are “what is going on” focused, as they are currently scoped, are largely going away. But there are a few realities to keep in mind that AI is not going to consume one and all:

  • People certified. Consumers are already questioning whether content is human or AI generated, implying a premium on content written or made by a mouth-breather. Like the fan feedback received by one of my favourite fiction writers using AI to draw aliens. This means people still will trust people over AI. At least for the next few years. We may see the emergence of several industry or country/bloc-specific “human-certified content” standards or certifications. Pricing structures for products and services may also reflect this. Made by Real People!

  • If you can prove your quality product did NOT have AI intervention, you may be able to charge significant premiums to specific client sets. Corollary to the previous point.

    

  • I would invest in proprietary and “HUMINT” (human intelligence) data, and data analytics, even more. Trust and premium for human-generated data drive this. The former is the secret sauce of many a company or data provider because of IP, exclusive access rights, analytical methodologies etc. New sensors and sensing / earth observation technologies, detection nodes etc. The HUMINT is who you know, and things that cannot, would not or won’t be digitised and consumed by a model. Whether it’s the sentiment of residents of a remote village near a mine, or informal benchmarking of incident response approaches to typhoons, there’s just some things that will always be just out of reach of a model because it’s not scrapable. Or you wouldn’t want to put into a model query or workflow because of information sensitivities. Building and maintaining both types of data is a pillar of staying competitive in coming years.

While I think AI will be highly transformative to any kind of business intelligence work, I’m more optimistic that the doomsayers that the field will be entirely automated with the loss of jobs. We may wake up in 18-24 months and wonder, how did we ever do our jobs without agentic AI? And, where’s the next source of competitive advantage now that everyone has LLM tools at their fingertips.

Do you think AI will be disruptive or the business of doing intelligence and geopolitics will largely carry on as it is? I’d like to know what you think in the comments!

Are you looking forward to the end of 2025? I sure am. It’s been a LONG year. It’s been like this kind of rollercoaster ride for many of us, I’m sure.

So let’s approach the grandstand finish to such an interesting year by taking stock of where we are in the world of geopolitics, and the business of “doing geopolitics.” How we - or the tools we use - interpret the world’s rules of the road are critical to the decisions we make. It matters to those we help make choices, and explain why it matters for their patch of turf. I’m going to take this in two parts - 1) my thoughts on the state of play of the business and where I think it’ll evolve and then 2) the role of AI applications and other software in transforming the discipline.

Survey after survey of CEOs the past several years cite geopolitical risk as a top 5 risk impacting their business. But when we dive into what exactly is geopolitical risk, opinions scatter like mice to a cat. Because it is a discipline that can mean markedly different things to investors, policymakers, decisionmakers and operators, context and clarity matter. My experience, and the insights my friends and peers have shared with me over the years, really show that:

• Most senior people in corporates don’t really care about geopolitics in of itself, let alone pay for it. This may be an unpopular opinion. They care about - and pay for solutions to - supply chain, mobility, reputational, market entry / exit challenges. If you don’t agree, let’s dance.

• Context is paramount. Are you (or your client) a bank? A VC fund? A law firm? A manufacturer? What falls under and adjacent to the geopolitical bucket is going to be very different for each of the above. One size does NOT fit all. In fact, I’d argue that the “what” is far more bespoke than what many practitioners and consumers may presume.

• Know what you’re actually trying to solve for. What are the key questions or problems that you or your client truly care about? What thresholds of market volatility attributable to the latest military conflict in region X directly impact our trading positions, and therefore P&L? How may a change in export controls by your “home government”’s adversary lead to harsher enforcement of local operating permits for your business? When do the Houthis make peace with the Saudis so I can send all my cargo through Suez again? What may be interesting for the practitioner is often of little to no importance to the consumer.

• Bespoke analytical models matter. Putting the previous points together, this means each organisation’s framework for understanding, processing and actioning on geopolitical risk-driven events and trends is going to look different. An investment bank’s analytical model is going to be heavy on country risk, sanctions/AML and regulatory risks. A mining company will give greater focus to supply chain, labour and activism issues, trade barriers and reputational concerns.

• You gotta make it real for people. Analytical models are a great foundation, but it has to tie back to how your (client’s) organisation works. Governance, risk and compliance frameworks controls. Stress testing exercises. Crisis management plans and resilience drills. Strategic comms and policy messaging. Sustainability targets and pathways. Transaction due diligence and approval conditions. And so forth. This means for real impact practitioners need to get a seat at the right tables to influence, drive, or author these processes and workflows. This is already a live area of risk management and I think it’ll grow.

• The hustle is real. The big time crises e.g. Russian invasion of Ukraine get the eyeballs, but interest dips rather quickly. How do you sustain engagement and deployment of resources (or funding / subscriptions etc)? Having a diverse range of engaged stakeholders matter, but within that it’s even more important to have 2-3 stakeholders who “hold the pen” that have persistent needs for your products.

• No one has found the best way to do it. There isn’t one. The most common places to see a geopolitical capability in a company are in the a) security department, b) government relations, c) strategic or enterprise risk, d) research, or less commonly e) cyber and f) AML/sanctions. In the financial services and insurance, you’ll also find it as a part of a country or political risk team. This reflects where an organisation believes where the impacts and demand is greatest, but about as often reflect a “I don’t really know where to put it best so it might as well be here” thought process. Many companies haven’t figured out where, or whether to fit such a capability into their structure.

• A mature state may end up being driven by the perceived risk-to-reward of the capability for the organisation. I’d argue that in the beginning it may be best aligned with the strengths of a security, government relations or research department, but as the capability evolves it may move elsewhere - including embedding it into a revenue-generating business unit or an existing business intelligence / analytics team. An operational risk focused intelligence capability may find itself wrapped up with cyber - more resources, greater regulatory raison-d’etre, much higher financial and operational “stakes”. As an industry friend recently remarked, it may be easier to train a cyber person to do geopolitics passably than the other way around. This is particularly salient for banks, big tech, and critical infrastructure operators.

• Things that I’m wary of, for now: a Chief Geopolitical Officer, or an in-house thinktank. When the times are good, fantastic. But when the belts need to tighten, how would these roles or functions demonstrate value creation or contribution to P&L? It will be interesting to see how operating models like JPMorgan’s play out over a full business cycle in connecting resources to P&L.

• GRC software is coming for security and geopolitics (probably). Compete, get acquired or get left in the dust. I was at the Risk Europe expo in London last month, and I must admit I have not been following this corner of the SaaS world much but it has advanced a lot in the past decade since I was embedded in a second-line risk department. More on this space in Part 2, but I do feel that

• It’s everyone (and maybe no one’s) business and that’s how we may end up. Geopolitical risk is not that different from other macro risks such as cyber, sustainability and data privacy in that the mature state is having the risk capability and controls embedded across the organisation. “Everyone has a role to play” in one way or another, supported by a small central capability (e.g. a business intelligence function that is AI + data analytics driven and is commercially oriented) or a couple of centres of excellence.

• How I think we’ll start “ending up”

  • At the top: C-suites, depending on their sector, geographic presence, risk management sophistication, and personalities within their makeup, will be largely split in either plomping more cash for top-tier consultancies that have heavy hitters who are ex-so’s and so’s (e.g. Hakluyt, Albright, WestExec, Forefront) or bringing on seasoned practitioners to lead very small teams (e.g. JPMorgan, Goldman, the old HSBC team). Stakeholders like Chief Risk Officers, head of Corporate Affairs or Head of Strategy would be the kinds of gatekeepers who would influence this decision. There will always be a space to engage people with the right relationships, but these firms’ analytical offering is going to be eroded in part by emerging “geopol-tech” capabilities.

  • The roles won’t be called geopolitics per-se: we’ll have a geopolitical capability “injection” into across a wide range of roles. Geopolitics should be everyone’s responsibility, like how everyone - not just the cyber folks - have a responsibility to keep their devices secure.

    • Government relations and public policy

    • Supply chain and third party-risk specialists

    • AML / sanctions teams

    • Resilience and crisis management

    • Cyber and physical security threat teams

    • Business and competitive intelligence / analytics

    • Credit and portfolio risk

  • Further down:

    • Commercial-facing units, some government relations and business intelligence teams, keen on maximising value in a cost-management world, would lean into one of several AI-driven SaaS platforms. There’s no clear winner here yet but several are emerging and more are almost certainly in stealth mode.

    • Risk / operations units would continue to use vendors who are able to quickly adopt AI applications and integrate it with their more “classic” toolkit, including people networks. Some organisations could lean into what McKinsey calls “strategic nerve centres” of intelligence and “centres of excellence” - in essence rebranded fusion cells of years past. I do sense that there is so much inertia especially in big organisations, many of whom face hard regulatory requirements, that some nodes will buckle under divergent demands and articulating a clear value proposition.

In my next post, I’ll talk more about:

• How AI is shaping our field and how it is at once an existential opportunity and threat, depending on where you sit

• Convergence of geopolitical with climate and other risks when it comes to how they’re managed in future organisations

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And it’s also time for the latest instalment of our expert series! This month, I’m joined by Henry Cheng, the Head of Corporate Security, Crisis Management and Resilience at Grab, the Singapore-based super-app for ride-hailing, food deliveries, digital payments and finance, and more. If you’ve lived in or travelled through Southeast Asia over the past decade, chances are you’ve used Grab.

Henry is a veteran of the corporate security community in Asia, with over 25 years of experience, including nearly 20 years serving in the public sector. We discuss the role of the security team at Grab and how they are responding to evolving environmental challenges across Southeast Asia.

Securing our Climate: Tell me a bit about who you are, your role, Grab, the markets it operates in and what the security team at Grab does.

Henry Cheng: I oversee corporate security, crisis management, and resilience at Grab.

Grab is present in the majority of Southeast Asia, with the exceptions of Laos, Brunei, and Timor-Leste. Our team specialises in physical security, risk intelligence, travel risk assessments, and executive protection. Additionally, we manage crisis response for Grab, offering guidance, administrative support, and training programs.

As a professional, I’m passionate about developing innovative strategies to safeguard organisations and ensure they’re prepared to tackle challenges head-on. I enjoy providing strategic advice and practical solutions that strengthen security across all levels of an organization. I’m a collaborative leader and team player who’s committed to driving excellence, solving complex problems, and helping organisations achieve their goals.

I’ve had the privilege of leading major projects, from crisis management initiatives to implementing cutting-edge approaches in asset protection, threat prevention, and covert auditing. I’m skilled at managing large-scale events, coordinating exercises, and building strong relationships with tenants, all while keeping emergency preparedness, fire safety, and crisis readiness at the forefront.

Southeast Asia is a geographically and operationally dynamic regions in the world. What are some of the biggest risks and challenges the security team faces?

One of our primary concerns is environmental hazards. The region is one of the most exposed to weather hazards - heat, flooding and seismic activity are common. The level of preparedness within our country teams will be key to quicker recovery efforts. We also view insider threats as having a significant impact.

If these are not addressed effectively, we could face issues such as data breaches or physical harm to our Grabbers, among other things.

What is the role of the security and adjacent risk / operations teams at Grab to look after drivers, passengers, physical assets etc?

Generally, we focus on the safety of our staff and premises, assisting the operations team in planning contingency measures. We also have a GSOC (global security operations centre) which provides a live situation report and helps us understand the situation on the ground.

What kinds of data does the team collect? How do you use it to inform good risk and commercial decisions? Who consumes this output?

The data we collect now is primarily from the GSOC, including date, time, incident type, impact to Grab, and water levels, for example.

We’ve observed an increase in typhoons in Vietnam and the Philippines impacting both our business and our partners. The incident and disaster data our GSOC collects is wide-ranging, including date, time, incident type, water levels, and impact to Grab. Recently, we identified an opportunity to use this data to help our ESG team analyse business impacts during hazard events. They found that our revenue dropped by approximately 70% during such incidents.

As our team’s goal is to enhance preparedness to reduce downtime and maintain business competitiveness, we work closely with the ESG team, along with other internal stakeholders, to shorten recovery times. This also enables Grab to better support local governments in disaster recovery efforts, such as delivering food and essential supplies.

We present this data to the ESG team for financial impact assessment. This report is then shared with our Executive Committee to highlight which countries need support with contingency planning.

This is a new approach, and we can use financial data as an indicator of operational readiness.

How is AI becoming embedded and applied in the security team, and where do you see the trend in AI applications in operational security?

At Grab, we are exploring AI to enhance our work efficiency, including reports, presentations, and manual tasks. The team is currently investigating AI-powered automation for travel risk reporting and monitoring. We want to enable travellers to query a bot for destination-related and critical information. The bot will also allow my team to track travellers in real time.

I believe the trend among operational security teams is towards leveraging AI, particularly agentic AI, to handle routine tasks, freeing our team to focus on decision-making, communications, and stakeholder management.

As climate change impacts intensify, how do you see that impacting what / how / scope of the security team at Grab?

The security team has an opportunity to better communicate risks, impacts, and how we can safeguard the business. The reporting [to the ESG team and Executive Committee] presents a significant chance for us to be heard, especially given the data demonstrates substantial financial impacts to the business during environmental events.

The key is to structure our problem statement more effectively and demonstrate our value. Our team’s mindset also needs to shift from a focus on physical security to one of risk assessment and foresight. Many environmental issues are sudden, with the exception of typhoons, so Grab needs to be prepared during “peacetime” through exercises, refreshers, and education. In this area, Corporate Security can make a significant contribution.

What also caught my eye recently:

• JPMorgan’s climate advisory team, led by Sarah Kapnick, published a white paper on climate risk and national security, presenting many of the themes we’ve discussed on this newsletter - that the growing converge of shared risks presents an investable opportunity across a number of areas: resilient infrastructure, data and intelligence, cybersecurity, supply chain management, new pools of capital / consumers of climate tech, and beyond. Worth a read.

• Darren Clifford at Adapt [us] Capital takes a more VC / PE adaptation view of the themes raised by the JPMorgan paper. What particularly excites me are the opportunities in the insurance space (more and better data = quicker and more targeted payouts, new pricing models), and water (for geopolitics and conflict followers, water is a recurring theme of conflict and migration for millennia). My friend John Robinson is the water tech for resilience guru.

In the next post, I’m coming back with a bit more around the state of play of the geopolitics cottage industry. And how climate risk world is doing its part to reshape the field in the coming years.

Until next time, stay warm (cool if you’re Antipodean)!

Hi folks! For the best part of past last four years, this newsletter has been dedicated to exploring the critical and sometimes overlooked intersections of climate change, risk management, security, geopolitics, and finance. I’ve written and opined extensively on how climate change and geopolitics are two of the biggest macro challenges we face, reshaping risk and opportunity for everyone. I’ve also written about solutions based on my experience and those of industry experts, from new ways of investing and emerging technologies to innovations in risk management best practices.

Short of an alien takeover, we’re going to be living with these problems for a long time. So there’s never been a greater need for actionable analysis, advice and solutions.

💡 In the coming months, I will be dedicating time to select consulting engagements and project work to help anyone with a burning problem or complex challenges. If your work involves navigating, silo-breaking, or business development involving climate risk and resilience, security risks, geopolitics and enterprise risk management, I am uniquely positioned to help you problem solve beyond the insights of this newsletter.

If you have a full-time opportunity, let’s talk (scroll to the bottom of how to reach me).

🧐 How I can help you

I am available to support you in a number of ways. I take a customer led approach, focused on what you - and your own clients or stakeholders - really need.

And I’m pragmatic about where I can actually help. As a former people and hiring manager, and over a dozen years of being asked “you need my SaaS solution / subscription / consulting service, today!” I’ve been where you are: you want someone who actually can help you solve your problem or hit your targets, not just talk at you at a high level. If I can help, everyone wins! If someone/thing else is better placed, I’ll work with you to find the right resources.

• Build your own intelligence team: Design, advise and build out best-in-class, value-creating intelligence teams inside of your organisation. And intelligence isn’t just security, geopolitical or cyber. Also climate, insider, risk, market.

• Proactive crisis and scenario planning: Design and facilitate workshops to explore high impact, plausible probability security, geopolitical and climate scenarios for your organisation. And building robust strategic risk management frameworks to set up your organisation to proactively manage these risks.

• Climate security risk assessment: Assess how climate impacts (e.g., extreme weather, resource constraints) could affect your operating environments, supply chains, people, or the stability in the markets you operate.

• Geopolitical resilience + opportunity mapping: Work with you to develop strategies that connect geopolitical risk with the “so what, now what” you need to translate risk to action or new investment opportunities. Examples include regulatory landscapes, location strategies, energy markets, supply chains.

• Bespoke analysis: Deep-dive reports, white papers, or tailoured briefings that translate complex topics which I cover in this newsletter into actionable intelligence at all levels of an organisation, from C-suites to operational teams.

You can learn more about my background and experience on LinkedIn, as well as

• Me talking about the intersection of geopolitics and climate risk on the Climate Proof and Inevitable (formerly My Climate Journey) podcasts

• A professional profile courtesy of my former employer

🤝 Let’s discuss your needs

If your organisation is looking for specialised support in any of the above, or if there’s something related that makes you think, “Alan could help me!” we can arrange for a brief, confidential discussion about your needs, at securingourclimate@substack.com.

I’ll continue to post here with more insights and podcast interviews in the coming months.

Thank you for continuing to be a valued reader.

This newsletter represents my personal views only, and not necessarily those of my employer.

Hey folks, it’s been a fair few weeks and I apologies for the radio silence. Both family life and the weather have been hectic! I’m keeping today’s note short as I plan to have another note out in the next few days. Thanks in advance for forgiving me for spamming your inbox - trust me they’re going to be worth reading!

I also am planning a few more interviews either side of the festive period and moving the podcast-y ones to Apple Podcasts / Spotify, so keep your notifications on to this newsletter once they drop!

• ☀️⬛️ Geoengineering gets a day in the sun! Elon Musk tweeted about the technology a couple of weeks ago as a salve to climate change. This naturally set off a lot of debate and commentary - expert and wildly uninformed - about why it’s a) the best thing since slice bread and solves all of today’s political issues or b) it’s godawful, worse than a nuke and belongs in the 15th circle of hell. I wrote about geoengineering last year (parts one and two) and my views remain similar - localised operations like cloud seeding are nothing new and could be beneficial, but larger scale geoengineering / solar radiation management is politically problematic in that its physical effects are going to be unbound by borders and ideology.

• 🤖 Bad agentic AI: Anthropic identified a cyber espionage campaign leveraging its capabilities to not just inform but execute cyberattacks. By manipulating Claude code, the actor leveraged agentic workflows to target dozens and successfully infiltrated several institutions. This has some serious implications for cybersecurity and intelligence work - it is a reminder that human-in-the-loop remains ever critical as more functions are devolved to autonomous agents over time in the space, whether it’s intruder detection, scanning, data loss prevention, or other core operational work essential to research and analysis. Those using agentic AI as the bedrock of their analytical workflow or external risk monitoring need to be careful because exposure of what and why you’re searching is, well, potentially interesting and valuable to adversaries and criminals.

  • Similarly, for software AND hardware developers there are serious implications. Your asset is exposed to espionage, and if it is considered critical national infrastructure, to adversarial state actors and what some term hybrid warfare. Let’s say you are leveraging a network of sensors to detect shifts in levels of salinity or toxins in reservoirs for your adaptation project in eastern Poland and changes in the data collected prompt automated physical actions with water treatment systems…well you can see where this goes.

  • And this was the first one reported by Anthropic. We’re only going to see more of these by criminal groups, state actors and “hobbyists” - bigger, badder, greater consequences.

• 🗺️ How much of today’s temperature is due to climate change?: this came out a few months ago but I’ve just circled back. Climate Central published a Climate Shift Index portal (free!) where for any day up to today, anywhere in the world, it will show you the temperature, how far off it is from historical averages, and how frequently that change in temperature is due to climate change - attribution! I find this a great way to clearly and visually communicate with others what kind of impact climate change is having, today. While it doesn’t forecast - and that’s important to bear in mind - the dataset is going to produce a good baseline to anticipate near-term shifts in temperature and, combined with other datasets, inform certain operational or business decisions ranging from managing outdoor workforces to prioritising the kinds of scenarios for operational resilience testing.

📥 Interesting looking jobs!

• The European Institute of Peace if hiring a climate and environment peacemaking officer for Yemen. Based in Brussels

• The Z Zurich Foundation (the insurance folks) is looking for a head of adapting to climate change, which sounds pretty cool. It’s based in, you guessed it, Zurich

• The Center for Climate and Energy Solutions in Washington DC is hiring for two climate resilience roles, with one focused on working with corporates to development standardised frameworks to demonstrate leadership on climate resilience.

And lastly I’ll leave you with this for the weekend. Have the ICC on speed dial:

Welcome back! It’s been a busy month again and am currently on holiday so this edition is a short one - I leave you three reads. And I’ve hope you enjoyed the interview with Matt Anderson of Cryogenx last month - let me know what your thoughts are and if you’d like to see more podcast-style interviews with those working the intersection of climate, security and finance!

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• 🇦🇺 🥵 The heat from down under: the Australian government released its first-ever National Climate Risk Assessment in September Australian Climate Security Leadership. Dividing its assessment across 11 different categories ranging from infrastructure to agriculture, it paints an unsurprisingly grim picture of what it would be like to live in Australia in the future. Like in many other parts of the world, coastal communities and the socioeconomically disadvantaged are disproportionally affected. But in a country of 27 million people, 85% of whom live within 50km of the coast, and where 1.5 million are estimated to be impacted by rising sea levels by 2050, these impacts may create more visible, lasting harm, sooner than countries with more temperate climes. In other words, the country’s “band of habitability,” already fairly narrow, is shrinking further. Australia, amongst Western countries, should be at the forefront of tackling this issue holistically, from maintaining military combat readiness to hardening infrastructure and across-the-board adaptation. Even if arguably the pace of focus can be much faster, as a group of senior ex-national security and political leaders argue, it may be that the floodgates of investment open once impacts hit even harder.

• 🇺🇦 War is still not part of a balanced breakfast: In one of my first posts back in 2023, I highlighted how war is bad for the environment, and horrible for carbon emissions. The Initiative on Accounting for GHG in War recently published the carbon cost of the first three years of the Russian invasion of Ukraine: almost 237m tonnes of CO2 equivalent, or the rough equivalent of the UAE’s 2023 emissions. Moreover, emissions would likely stay elevated with postwar reconstruction. The right kind of lasting political settlement paired with reconstruction policy focused on resilience and energy security e.g. green cement and steel, decentralised grid, batteries everywhere, electrification could form part of a broader defensive strategy ahead of potential future rounds of conflict. In Ukraine, I think that would be a smart bet.

• ⚔️ Staying on the climate and conflict theme, Duncan Depledge at Loughborough University argues that militaries need to be part of solving for climate change impacts, inasmuch as they are major contributors today. A big reason is that militaries are often - and increasingly diverted - to respond to humanitarian and disaster response operations, tasks which militaries are generally not optimised to perform. The other reason is that as one of the biggest consumers of hydrocarbons, they are either going to be a major stumbling block or accelerator of the energy transition under the banner of energy security and maintaining a nation’s strategic autonomy.

• 🇧🇷 COP time again: COP30 is later this month in Brazil and adaptation is thankfully on the radar again. Some countries would announce updates to their National Adaptation Plans (64 countries have submitted one to the UN as of 1 September), and more discussions on the so-called Baku-to-Belem roadmap to get US$1.3tn annually of public and private funding towards climate action by 2035 with a focus for developing countries - whose needs are heavily skewed towards adaptation. Will there be a big splash or breakthrough? Well, the harsher impacts of climate change are a lived reality for more and more people especially in wealthier countries and the big emitters, but the political headwinds over the past 12 months globally have slowed momentum significantly outside of Europe and China. Not holding my breath but it’ll be great to see more private funders than ever likely showing up at COP30 and making it clear to the public sector that private money at scale is also becoming a lived reality.

  • But more pressing for the organisers: getting all the buildings finished before the start of the conference. Athens 2004 vibes?

• ⚽️🦅 Finally, Crystal Palace unfortunately ended one of the greatest undefeated runs in its history, but I’m still feeling great. Sixth in the table and could be higher, with probably the best manager we’ve ever had. We are living in charmed times, COYP!

Enjoy the reads and see you next time!