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How Climate Change will drive Geopolitical Risk: And how companies can prepare

Last year was when climate risks become a reality. Major rivers including the Rhine, Po and Yangtze fell to record lows. Heatwaves in China forced many factories to close over the summer. Pakistan suffered a devastating once in a century flooding and extreme heatwaves.

Climate change will make extreme weather such as the flooding or heatwaves more frequent and deadly. Floods can cause great human suffering, destroying homes and businesses and encourage the spread of water borne disease like cholera. In Pakistan’s case, flooding also dealt a deadly blow to an already fragile economy. The chaos and disruption of flooding means lower economic growth, higher debt payments and a massive bill for reconstruction.

The ripple effect of climate change goes well beyond the headlines of new extremes of weather; the impacts will spill over into politics, economics, and society, radically reshaping the world. Climate change acts a force multiplier, accelerating existing threats (extreme weather, flooding and drought have always been with us) to make them more common and deadly.

Conflict and Climate

Climate change induced drought and desertification in the Sahel region of Africa has driven the rise of extremist and militant groups in the region. Climate change and increasing demand has seen water sources dry up across an already water stressed region. This has pushed many farmers and pastoralists from the land.

As traditional livelihoods disappeared desperation pushed locals into the arms of extremist groups such as Boko Haram and Daesh. The rise of these groups have sparked a number of conflicts across the Sahel, pitching government forces against these extremist groups.

A hotter world is a more unstable and dangerous one. A world facing more hunger, drought and conflict will experience more geopolitical conflict as countries grapple over dwindling resources. The construction of the Grand Renaissance dam in Ethiopia has sparked anger in Egypt because it threatens the flow of water on which it is highly dependent. If as expected, the Nile shrinks further due to climate change and growing demand for its water. Egyptian agriculture will become increasingly unviable.

Climate risks should not be seen in isolation, rather as a series of shocks, which will overlap and overwhelm governments

As temperatures rise, the likelihood of mass crop failures across the globe increases. Already many of the world’s breadbaskets are under pressure from record-breaking heat and water shortages. The Indus and Ganges River basins in South Asia face the overlapping burdens of rising demand, extreme disruptive weather, and rising temperatures all factors that threaten the region’s status as a breadbasket.

A mass crop failure one or more key crop growing region such as the Ganges Basin, Euphrates or Nile basins would impact millions of people creating famine, and potentially engulfing the world in economic and political chaos. Widespread crop failure along with extreme heatwaves would likely see mass migration, that could see the movement of millions of starving and desperate people attempt to cross borders.

Syria

The movement of Syrian refugee into Europe caused a major political crisis as countries such as Turkey and Greece grappled with millions of desperate people flocking to their borders. Academics have linked the long running refugee crisis sparked by the Syrian war to climate change. A multi-year drought pushed many poor and hungry farmers into cities created an angry, politically volatile movement of people eager to protest at the government.

Policy makers and scientist are careful not to attribute an event solely to climate change. However, it will make events like the Syrian drought and subsequent war more common and frequent.

Systemic Risk

One or more major crop failures would trigger higher global food prices. In turn, this would put major pressure on economies across the world and unleash unpredictable political reactions. Governments may turn to isolationist policies such as export controls on food in an attempt to protect their own populace. Nations could lurch toward extreme politics or lash out at neighbours in an attempt to seize resources such as supplies of water.

The Covid pandemic was in many ways a foretaste of the future, the virus itself was a major killer, but the second and third impacts were also enormous, think of the unpredictable economic disruption and societal change – all factors that are still unfolding. The Chinese government shifted from strict lockdowns to relaxing Covid restrictions in a matter of weeks causing confusion and disruption in and outside China.

How can organisations prepare?

Companies need to prepare for a more unstable world. One leader in this regard has been the US military who recognises Climate Change as a “destabilizing and potentially catastrophic transboundary challenge”, and has prepared detailed scenarios so it is prepared for a wide range of threats to unfold.

Other organisations should follow this example and create credible climate related scenarios that could influence their own operations. This might include deep and disruptive economic shocks and loss of markets in badly afflicted regions, supply chain interruptions, and widespread political uncertainty.

Organisations should develop simulations and exercises that allow them to understand how these scenarios will this affect their operations, and how they should respond. Successful firms of the future will have a plan for dealing with climate change. Firms that plan successfully can also thrive in these adverse circumstances.

While the picture painted around climate change is often bleak, there are causes for optimism. The pressures of this new world could spark a powerful reaction as countries extend and develop innovative technologies to mitigate, or even reverse the damage of climate change (think of how quickly Covid vaccines emerged). The same pressures could even see the world pull together politically to develop successful policies and initiatives to combat this existential threat.

Where others fear to tread: China and the frontiers of global lithium mining

Global demand for lithium is set to explode thanks to the insatiable demand for electric batteries. A typical electric car battery requires 8 kg of lithium. The International Energy Agency (IEA) estimates that demand for lithium will increase by 40 times from 2020 to 2040.

Lithium is the lightest and least dense of all the metals, that and its high energy density makes it the ideal component for batteries. Currently, the production of lithium is dominated by just a few countries, Australia, Chile, China and Argentina.

Chinese factories dominate the refining of lithium (refining turns it into lithium hydroxide which can used in batteries.) as well as manufacturing the lion’s share of electric batteries. This means that Chinese firms hoover up lithium supplies from across the world dominating its supply chain.

Electric Batteries

Electric batteries are set to be one of the critical industries of the future as the world tries to decarbonise by weaning itself off polluting petrol cars. Electric vehicles have reached over five percent of global car production as manufacturers switch focus . The market for electric vehicles is expected to reach US$ 827 billion by 2030.

Now other nations have woken up to how much China power has amassed over the years. Many governments are now taking action to ensure they can take a slice of this critical industry.

The US, EU, India and many other countries want to make sure they can establish their own electric battery manufacturing sectors and avoid dependence on China. Part of this means ensuring cheap, reliable supplies of lithium. The scene is set for a battle between the great powers to control the supply and processing of this white gold.

Demand for lithium could grow to more than 40 times current levels if the world is to meet its Paris Agreement goals.

Chinas’ New Frontiers

Sinomines a Chinese mining conglomerate which is at the vanguard of China’s global commercial rise has recently invested in Bikita lithium mine in Zimbabwe. The mine around 320 km from the capital Harare underlines increasing Chinese investment in the economy which many western firms have fled.

China has also been establishing relations with the isolated Taliban Government in Afghanistan. Chinese mining giant Metallurgical Group Corp (MCC) have been looking to reopen copper and oil interests in the country. Other Chinese miners are rumoured to be considering extracting lithium in the country. Surveys conducted by the Soviet and US geologists over the last four decades indicate that the country has commercially viable lithium reserves around some of the country’s salt lakes.

Recent reports indicate that the Mes Aynak (reputedly the second richest in the world) copper mine in Afghanistan will open soon. The political and security situation in Afghanistan remains highly fragile, but demand is such that Chinese miners could be ready to extract lithium there soon.

An OPEC for Lithium?

Countries which produce and have deep reserves of lithium are looking to protect their own interests. Argentina, Bolivia and Chile are in advanced talks to create an organisation with the purpose of controlling the price of lithium. Indonesia is rumoured to be looking at starting another organisation based around the supply of other minerals vital for building batteries.

OPEC has had its ups and downs over the decades. But the organisation been highly successful in protecting the interests of major oil producers. However, the prospect of South American countries could raise the hackles of consumers like China and the US. Any attempt to control the supply of lithium may be met by a counter response. China and others could cut flow of capital and expertise needed to extract or mine lithium.

Countries that are building batteries are also looking to protect their interestes. Initiatives like the critical mineral partnership are an attempt by battery manufacturers to build reliable supply chains for critical minerals like lithium.

Australia

The biggest threat to Chinese dominance could come from the earth’s crust. Lithium is found in plentiful amounts in below the ground across the globe. Australia already produces vast quantities of lithium which is mined rather than extracted from brine. The giant Greenbushes mine alone produces a 5^th of all global production. However, Australia has lacked refining capacity – turning the lithium into a usable lithium hydroxide which can be used in batteries.

The cost of extracting the metal is the main variable which determines price. High sustained demand will encourage others to try and mine lithium. The US is now looking to expand domestic production. Cornwall in the UK which was a mining powerhouse for many years is also now looking to open lithium mines. New innovative methods to extract the metal will likely emerge. All these factors should diversify the supply of the metal.

Although it takes 4 to 5 years to bring new mines online, capacity now looks set to grow rapidly. As electric batteries become more popular the potential for recycling them should increase which could also affect demand.

Dependence on lithium has pushed producers to look at alternatives such as sodium, magnesium, sea water and tungsten. However, none of these metals has been used at the scale in the way lithium batteries have.

What will the future bring?

As the demand for lithium grows so will the incentive to increase production. But new mining projects are capital intensive and can take years to become productive. Recycling, use of alternatives and new production should all ensure that there is no shortage of lithium in the long term. Lithium supplies are a crucial part of the global energy transition which means a shift from hydrocarbons to metals and minerals and that will also transform geopolitics for years to come.

Geopolitics, Climate Change and Energy Transition

Why the next decade will be warmer, more chaotic and conflict ridden

What is causing this?

Global politics is changing. China has emerged as a rival to the US and a multilateral world is emerging. China, Russia and others feel constrained by the US and the West. Conflict has already emerged in Ukraine and many predict war over Taiwan before the decade is over.
Many countries are highly vulnerable to climate change and will be busy dealing with a cycle of floods, heatwaves and extreme weather and the consequences of these changes: such as economic chaos, migration, starvation, and decline.
As the world shifts to renewable energy and starts kicking its addiction to fossil fuels new international power structures will be forged. Competition over the critical resources will intensify and future wars could be fought over water, nickel, lithium and copper rather than oil or gas.
These three trends will push the planet into economic, environmental and social decline unless governments, people and companies can respond to these challenges.

Global Rivalry

Geopolitical rivalry has already scuppered talks between the two big beasts of emissions – China and USA. US support for Taiwan has angered Beijing so much that it has suspended talks on all climate matters. Special US Climate Envoy John Kerry tried and failed to separate climate talks from other strands of diplomacy. Of course, Beijing and Washington will continue to develop their own climate plans, but lack of dialogue on such a crucial issue raises serious concerns.

This year the US Congress passed historic, albeit imperfect and two decades late legislation. But the Inflation Reduction Act (IRA) should now provide the path to a low carbon future for the country. Beijing is stepping up its impressive rollout of renewable energy but remains wedded to coal and many other high carbon industries. But the fact that the two climate giants are not talking is an indictment of global leadership.

Taiwan

This split could just be a taste of future conflict, China could seek to invade Taiwan potentially sparking a wider Pacific war involving the USA, Japan and others. China (and Russia) feel encircled by the west who they see as hypocritical and self-serving. Even without a full-blown war, the tensions between China and the US will see further disputes, flashpoints and proxy conflicts that will destabilise the global politics over the coming decade.

The Keys to the Economy of 2030

A low or net zero carbon economy is now the stated aim of virtually every country on earth. It is undeniable that progress towards net-zero has been too slow but shifts are clear to see. The falling price of renewable energy, the new focus on environmental values has taken root in large companies.

This trend is undoubtedly uneven, prone to greenwashing and has already attracted a backlash from climate deniers, but the momentum is clear. Large companies have at least now pretend to be green and many are making serious efforts to decarbonise their operations.

But what does this mean to the global economy and how will this impact geopolitics?

On a macro level there is a shift from a fossil fuel economy based on supplies of oil, coal and gas. Fossil fuels are mined, drilled and shipped in huge quantities to power every corner of the globe. The constant flow of these fuels powers every part of modern life.

Decarbonisation means modern life will be primarily powered by electricity. Electricity from the sun, wind, earth and water (plus nuclear).

These technologies such as wine turbines and solar panels are capital intensive and rely on the supply of critical materials such as copper, nickel, lithium, graphite, rare earth metals, cobalt and others.

The mining, refining and supply chains of these materials will become geopolitical flashpoints in the same way the Straits of Hormuz or Malacca, the Russian Federation invasion of Ukraine are for oil and gas supplies.

The world is steadily shifting away from fossil fuel intensive to mineral intensive one, driven by trends like the take up of electric cars, policy shifts like the EU Green New Deal or Inflation Reduction Act in the US.

China took an early lead realising the importance of electric batteries and subsidised the sector for many years. Beijing also took a strategic role in controlling the supply chain of metals and minerals needed to build these engines of the transition economy.

Supply Chain Security

Now other states have caught on. The USA recently took action to secure its own supply chains of critical materials. Now India, the EU and others are following China and the USA’s lead. For many years the electric car battery was a futuristic dream. Now it has become a symbol of national and economic security.

However, modern supply chains are long, complex and messy. It will be difficult to fully control the supply of so many different materials and components. This means that in the scenario of a major conflict between China, Taiwan and the USA in the Pacific – supply chains would be severely disrupted and many industries reliant on the flow of trade from the region would be interrupted. Thus slowing the energy transition.

2022 the year Climate Change hit home

2022 was for many the year that climate change felt real. Across China record breaking drought saw rivers shrink and whole industrial areas shut down due to the excess heat. India experienced a sweltering heatwave devasted farmers and making living conditions unbearable for many. But perhaps worst hit was Pakistan.

Pakistan received five times the normal amount of rain in 2022. The Indus River which runs through the length of the country flooded the country. The flood hit over 30 million people and washed away 2 million homes and businesses, over 700 km of roads and left widespread devastation.

The floods started with the record temperatures in Pakistan. Jacobabad recorded 51 C earlier in 2022. Hot air holds more moisture, this results in higher rainfall. This along with melting glaciers in the Himalayas created the ideal conditions for a record-breaking monsoon.

The floods have created thousands of internal refugees and the lingering water makes the perfect breeding ground for water borne diseases like dengue fever and malaria. Experts are also predicting that the floods will take years and decades to recover from. Farmers will struggle to plant crops, roads and bridges will have to be rebuilt and Pakistan’s overstretched finances will be pushed further into the red.

Climate Fragility

Pakistan was already a fragile country rocked by political instability and poor relations with its giant neighbour.

Despite these problems Pakistan had been enjoying moderate economic growth. But now the floods look set to reverse this trend as the country rebuilds. Pakistan may also end up becoming more dependent on China, which has invested heavily in the country as part of its flagship Belt and Road geo-economic policy. China has heavily backed infrastructure development, seeing Pakistan as an investment target and a potential alternative trade conduit from the Middle East.

Storm Clouds over Sharm el-Sheikh

The COP 27 Conference in Egypt this November is a chance for countries to discuss climate change, decarbonisation and how to pay for it. Western countries promised but failed to deliver on a promise of US$ 100 billion a year to mitigate and develop resilience around climate change.

Pakistan’s climate change minister Sherry Rehman asked why the country is paying the price for carbon emissions it had very little part in. This question is certain to come up in COP27 in Egypt this year. Developing countries that are paying the price for crippling climate change will be asking richer countries that created the emissions to stump up for the costs.

The problem is that public opinion in many richer countries will be unfavourable to funding climate mitigation overseas. In addition there will be the usual squabbling on which countries are most culpable – are high per capita emitters now and/or historic emitters but now decarbonising like the UK the most to blame? Many will point the finger at emerging economies like Pakistan with growing populations as future sources of carbon.

Pakistan also faces another risk as it has moved away from the west, the conflicts over Afghanistan and an eventual diplomatic breakdown with the US during the tail end of the war of terror saw aid inflows fall. Instead, Pakistan looked North and forged a partnership with China.

China – Pakistan Nexus

The China Pakistan Economic Corridor (CPEC) is a series of Chinese funded infrastructure projects across country valued at US 62 billion. However, economic pressures at home have hit China and its not clear if how they will support Pakistan through another debt crisis. Instead, Pakistan will most likely have to turn to a familiar source, the IMF – which will no doubt request economic reforms in exchange for further funding.

These over lapping crises have the potential to produce a outcome worse than the sum of their parts. This so called Polycrisis where disparate shocks interact and threaten to overwhelm our collective ability to respond to crises. Humans appear to be constantly firefighting and crisis managing, but not solving underlying problems.

Will this decade see humans resolve great power conflict, climate and many other technological and socetial issues? Recent history is not particularly comforting, but hiumans have proved themselves and adaptable and innovative in the past when faced with seemingly intractable problems.

The Geopolitics of Nickel: Energy Transition, Electric Vehicles and Environmental Destruction

“Nickel is the biggest challenge for high-volume, long-range batteries!” Elon Musk

Cobalt, lithium and copper have often dominated headlines about electric vehicles and energy transition. But there is another metal, traditionally used to produce stainless steel, which has emerged as a critical element in the energy transition story. Nickel is a key material in the production of electric car batteries (EV) which are experiencing rapid growth as the world moves away from fossil fuels.

These shifts mean that nickel is in hot demand and EV manufacturers are chasing precious supplies of the metal. The recognition that batteries are central to energy transition supply chains and ultimately national economies has set in motion a geopolitical race to secure supplies.

Tsingshan, a Chinese firm which is the world’s biggest producer of nickel was badly stung by this shock, losing large sums of money. Tsingshan are now reportedly looking to sell its Indonesian nickel assets to another Chinese giant Baowu. But how did it get them in the first place….

Nickel production is currently dominated by just a few countries; namely the Philippines, Russia, New Caledonia, Australia and Indonesia. This places enormous power in the hands of just a few suppliers. For instance, the fear that Russian supplies of nickel could disappear from the market following the country’s attack on Ukraine in February 2022 caused prices to rise an unprecedented 250 percent on the London Metal Exchange (LME).

It was a nickel shortage in China following the great financial crisis in 2008 that originally prompted Chinese steel giant Tsingshan to secure long term supplies. A decade ago, nickel was primarily in demand because it is a vital part of the stainless steel making process.

It soon also became apparent that nickel was also needed for building electric car batteries, which so much of the transition economy depends upon. At first sight securing nickel supplies should be easy. Indonesia is one of China’s major trading partners and holds the world’s biggest reserves of the metal.

However, the Indonesian government had realised that selling raw nickel might bring strong short-term revenues, but eventually this would leave them exposed to global commodity downswings. Instead, the Indonesian government had an ambitious plan to move up the production cycle and to process nickel to make the purified product which is needed for EVs. A more profitable process than just exporting the raw ore.

Tsingshan got on board with this vision and started investing heavily in the Indonesian district of Morowali, building the infrastructure to mine, refine and then finally ship nickel to China. There are plans for the electric battery production and an integrated supply chain for EV batteries to be established in Indonesia. An MOU was signed with CATL the Chinese battery producer in 2020 but nothing solid has yet materialised.

Enter the Dragon

Other Chinese firms soon followed in Tsingshan’s footsteps into Indonesia to secure nickel and other critical metals. Tesla was reportedly in talks with Indonesia mining interests but pulled out due to environmental concerns.

Tesla’s move highlighted the fact that environmental protections can be lax in Indonesia and that the processing of nickel can be highly carbon intensive. The nickel mines in the Indonesian Obi Islands have seriously polluted the waters around the islands turning them red.

This devasted the lives of fisherman and created a lot of anger towards nickel mining firms. Indonesian nickel is smelted using coal, which is a big problem for EV producers who want a carbon free supply chain.

The Geopolitical Race Heats Up

In August 2022 the Biden Administration launched a program to secure critical supply chains. This has accelerated a geopolitical race to secure supplies of critical materials for electric vehicle production and other key ingredients for global energy transition. Countries and corporations want to secure supplies from friendly countries so conflict or trade wars do not interrupt supplies.

Demand for nickel is expected to rise 10 fold by 2030, with supplies relatively limited and difficult to access due to local environmental and social concerns as well as the cost of developing new mines means further geopolitical competition to ensure that supplies of nickel are secure. This will mean China, the US and others which have realised the importance of reliable EV supply chains and ensuring good relations with the states which hold deposits of nickel and other critical metals is a priority.

The US fears that supply chain issues and reserves in the hands of rivals could see supplies of critical material dry up strangling the the young EV sector.

After pleading with miners to secure new supplies of nickel Tesla signed a contract with Talon Metals in 2020 to provide US mined nickel. Talon have claimed they can mine Nickel in a carbon neutral manner. This claim is a big plus for environmentally conscious battery makers like Tesla who are under pressure to ensure their vehicles are zero or low carbon.

Whether Talon can deliver on its promise of carbon neutral nickel remains to be seen. But at the very least Tesla’s deal also shows that the demand for sustainably produced nickel is there.

Environmental Damage

Another cost hangs over nickel the enormous environmental damage that it can cause. The Fenix nickel mine in Guatemala has been the scene of a long running and violent dispute over pollution in Lake Izabal. When local fishermen complained of a rusty coloured patch of water in the lake they took their concerns to the authorities. But the government and the miners attempted to put a lid on complaints about the mine, resulting in a long running dispute.

Activists managed to get the mines licence revoked, but the mine owners in league with the government struck back using threats, bribes, arrests and eventually martial law to supress the protests and reinstate the mine.

Hackivists took internal emails from the miners (Solway group a Swiss company) and exposed publicy that the firm knew the pollution was from the mine and not an algae bloom as they claimed.

As demand for nickel rockets, the pressure to develop new mines will rise. Each new mine is likely to put pressure on local communities that face the environmental destruction and pollution that nickel mining brings.

“I think ESG risk cannot be separated from business risk. The dichotomy only leads us to the old pattern that caused the current climate crisis,” says Muhammad Rushdi, a researcher with Indonesian NGO Action for Ecology and People’s Emancipation (AEER).

New Caledonia

The Goro mine in New Caledonia is another that has attracted criticism thanks to five chemical spills and a chequered history of production. Ownership passed from Brazilian Vale to locally owned Prony Resources along with Trafigura which has promised to develop a social licence and local investment, taking into account the wishes of the Kanak people that were previously ignored.

Tesla have also become a stakeholder (or technical advisor) in Goro bringing greaterscrutiny and the hope that it will encourage best environmental practices.

Nickel production creates a lot of waste, if it isn’t dumped in the sea it needs to be drystacked or tail dammed, both options need a lot of land. The other alternative is deep sea disposal, currently only 20 mines use this method as it is notorious for destroying marine environments.

What next for Nickel?

Clearly nickel mining needs to be carefully regulated to ensure environmental issues are minimised and future environmental incidents do not become a pattern. The risk is not only to local people and communities but also to the electric battery sector – if it becomes associated with poor environmental practices it will undermine both its green credentials and the wider clean energy transition.

As well as an environmental flashpoint New Caledonia could also see geopolitical tensions over its mining assets. China is the world’s biggest EV manufacturer not coincidentally is also the biggest purchaser of nickel from the island. The Pacific island is a French province which has been rocked by demands for independence and any future shifts away from France will be watched carefully by Beijing as an opportunity to extend its influence in the region.

The race for nickel looks set to heat up over the next decade as EV batteries become a central part of the global economy. Control over nickel supplies and their carbon/environmental impact will be of critical importance to battery/car manufacturers and the countries which have an interest in controlling this vital supply chain.

Developing environmentally sustainable mines as promised by Talon will be an increasing priority for EV producers that are particularly sensitive to any criticism that their products are not green.

Risk and Sustainability in Supply Chains

Investigating how firms can protect and decarbonise the arteries of the global economy

Modern Supply chains are both a major source of greenhouse gases and highly exposed to climate risks. Progressively minded companies should critically assess their supply chains and ask two questions:

➡️What are the climate risks inherent their supply chains and how can they be mitigated?

➡️How can supply chains be decarbonised to help push the world towards net-zero.

Below I will delve into how companies can assess and attempt to reduce the carbon emissions in their supply chains. Companies need to reduce carbon emissions to slow the impact of climate change. A warming planet means more incidents of extreme weather. These climate risks will impact supply chains more frequency and with greater ferocity as climate change accelerates.

Climate Risks

⛓️2021 and 2020 were unprecedented tests for supply chains. The impact of the pandemic meant volatile demand for products and energy as well as political turmoil. The result was disruption, inflation and many companies reconsidering their supply lines.

🔥🌊Extreme weather events also disrupted supply chains. Typhoons in Asia, a deep freeze in Texas and flooding in Canada and Germany, plus many other events interrupted trade across the world.

Climate change is already increasing extreme weather events. Over the next decades the world can expect more frequent hurricanes, flood, and extreme heat. Supply chains will be tested by ever more frequent, random, and intense acts of nature. Likely scenarios include:

🌊Flooding of a major export centres such as ports and cities. The flooding of Vancouver in 2021 effectively cut off large parts of Eastern Canada to road traffic. Floods like this will become a regular occurrence causing billions in damages and interrupting the transportation of goods and people to afflicted areas.

🔥Extreme heat resulting in drought and the failure of a major crop across multiple geographies at the same time (Rice, wheat, barley). This scenario would see supplies of staple goods fall and prices rocket. Countries will ban export of staple food products to feed their own populations. The result would be starvation, political unrest and food price inflation across the globe.

🌊Heavy rain in South-eastern China could disrupt the supply and production of rare earth metals. Rare earth metals are a key ingredient in the production of electric cars and many other modern electronic devices. Other countries like the US are now increasing the production and supply of these metals to reduce dependence on China.

⛏️Currently China is responsible for around 80 percent of the world’s production of rare earth metals. Disruption to one region could severely damage the supply chain for the likes of battery makers like CATL, car manufacturers or smart phones.

Identifying Climate risks along the supply chain. Climate risks can be either acute or chronic.

Chronic risks are long term trends such as changing rainfall patterns and long term rising temperatures that impact the environment. These are long term shifts damaging crop yields or industries which in turn impact supply chains.

For example, rising temperatures are already threatening the international coffee sector. A changing climate will cut coffee production, causing many existing suppliers to collapse or experience reduced production. This in turn will force producers to look to alternative suppliers.

Widespread droughts and desertification will force many farmers out of business. Climate impacts will be especially hard hitting in Africa, the Middle East and the Indian Sub-continent. Supply chains will be forced to shift in response to this by finding other sources of coffee or disappearing altogether.

Acute risks are one off or recurring incidents

💨Acute risks include hurricanes, extreme heat and rain and flooding. Extreme weather is already becoming more frequent and intense. Disruptions are already hitting supply chains. Weather related insurance claims have rapidly increased over the last decade. This trend will accelerate over the next decade.

Companies are ill prepared for these disruptions partly because understanding how climate risks are changing the world is a relatively new concept for most of the corporate sector. Most organisations are only now discovering and measuring the risks that climate change poses through application of the TCFD principles.

⛓️Companies will also face problem because they do not fully understand how their own supply chains operate. Companies will need to tackle the complexity and opaqueness of supply chains to discover how risky they really are.

💡Understanding supply chains in more detail will allow companies to identify sectors particularly vulnerable to extreme weather events. Armed with this understanding companies can make contingency plans, consider alternative supply routes or even using dual suppliers.

Other ideas are disaster proofing supplier facilities or production, allowing more stockpiling to be build a buffer for delays and taking out insurance to allow for losses. Of course, it is impossible to forsee how complex unpredictable weather events may play out. But it is possible to be well prepared.

Threat Multiplier

🪖Climate change will also act as threat multiplier, increasing the risk of conflict, uncontrolled migration, and political instability. In turn this places pressure on supply chains. Political violence in the Sahel and Sahara regions have been linked to increasing pressure on scare resources such as water.

⛈️Water supplies are threatened by falling rainfall and rising temperatures (connected to climate change) as well as by a growing population. These knock on, or second order effects, will become more common. However, they will be difficult to predict or even directly connect to climate change, but will contribute to a sense of a more chaotic and unpredictable world.

Firms that consider risk and address decarbonisation in their supply chains will undoubtedly gain a competitive advantage. Consumer demand, government regulation and shareholders are all pressuring companies to decarbonise their activities and by extension their supply chains. The first movers will decarbonise and (partially) derisk their supply chains before competitors.

However, whatever progress is made on decarbonisation a dangerous amount of climate change is “baked in”. Therefore, disruption to trade, logistics and supply chains are sadly inevitable and companies need to be assessing and mitigating these risks now. Of course it is difficult to mitigate many sudden and unexpected events such as hurricanes, or extreme heat waves. Firms will have to learn to live with and adapt to this more volatile, risky and dangerous world.

How should companies react

Companies should be analysing their supply chains for potential climate risk. However, modern supply chains are extremely complex and often opaque. It is difficult for even well-resourced companies to understand how all the commodities, products and components that flow across the globe to create their goods originate from. Supply chains have multiple layers stretching across different continents and run into hundreds or thousands of different suppliers.

This picture is not static, suppliers are constantly changing which adds another layer of complexity. Even a relatively simple product like an electronic toaster can have thousands of different components from hundreds of different suppliers. Despite this many companies like Unilever have tried to push systemic change through their supply chain to make it more sustainable.

Understanding Supply Chains

The first step for a company is understanding their own supply chains. Whether they are manufacturing company in China, a shoemaker in Ethiopia or a pharmaceutical company in Germany. All firms are reliant on a complex globalised supply chain to efficiently create a product. While it is probably impossible to track every step and supplier in modern trade networks. It is possible to focus on the most critical suppliers.

Companies should start with the basics. Identifying tier one suppliers of products and commodities and opening a dialogue with them around carbon emission and setting targets around how they can be reduced.

This is by no means an easy process and tier one suppliers may not want to, or easily be able to reduce emissions data. Another step companies can take to encourage suppliers to green themselves is to set transparent, public targets on emission cuts to act as a target and incentive for change.

Companies may need to take strategic decisions such as buying locally to reduce transportation (and hopefully carbon) costs. In other cases, suppliers may not be able to reduce their carbon emissions and alternative suppliers will have to be found.

Car Manufacturing

🚗The car manufacturing industry is unsurprisingly a heavy user of steel. Traditional steel production is highly carbon intensive. Swedish manufacturers have recently pioneered an innovative technique to create zero carbon steel. but this technology remains in its infancy and has not been widely adopted across the industry. Also using low carbon steel is currently more expensive – costing around 50 % more.

🏭Manufacturers will be forced into difficult choices that increase costs. The good news is that as zero or low carbon solutions become more common, costs will fall. So as zero-carbon steel becomes adopted by more manufacturers and production scales up. Over time the cost of producing steel in a sustainable way will fall making it a more viable alternative.

Second and Third Tiers

The next stage is engaging suppliers in the second and third tiers. This means the firms that indirectly supply a company. In many cases there may be no existing relationship or knowledge of these suppliers, which makes the task much more difficult. In theory there should be a cascading effect as first tier suppliers push change onto second and third tier suppliers.

As firms engage the first tier of supplier for low carbon alternatives, they will naturally turn to their suppliers to ensure they can also reduce carbon emissions. However, this is much harder to track as it relies on monitoring supply chain activity and trusting that suppliers are providing accurate information.

🛰️Improved data and analytics around supply chains can also be an ally in progress. Satellite data, the Internet of Things (which means real time tracking of products), blockchain to verify the exchange of goods can also make it much easier to track, locate and validate supply chains.

Companies have a long road ahead in terms of identifying climate risk and decarbonising their supply chains. But the firms that take the lead in decarbonising, desrisking and understanding their supply chains will give themselves a competitive advantage.

Eyes in Sky: How geospatial finance is transforming our understanding of the earth

🛰️In 1957 Soviet Union shocked the world by launching the first satellite, Sputnik into orbit. Since 1957, around 11,000 satellites have been launched into space by an ever expanding list of countries (Nigeria was the latest to start a space program) and private companies. The recent emergence of low cost and orbit “nano-satellites” (those weighing between 1 – 10 kg) and crucially costing less than half a million dollars has rapidly expanded the market.

Falling costs

📉The lower cost of launching Nano satellites has in turn brought down the cost of satellite imagery. Previously satellite images were largely the domain of the military, NASA and other specialist agencies. Now satellite data is widely accessible to the public and private sector.

🌍Each satellite is another set of eyes on the earth. In combination with terrestrial and aerial sensors we can observe the planet and all its vital signs at a lower cost with more accuracy than ever before. For many this means being able to navigate traffic or look at houses on Google Earth. Others soon realised the transformative scientific and business potential of satellite imagery.

🕶️🔎Satellites provide an accurate, up to the minute view of what is happening to land, sea, rivers, crops, cities, and every other part of the globe. With the aid of computers and machine learning this information can be transformed into valuable data sets. But what can you do with this data?

SustGlobal

I was fortunate to speak with Josh Gilbert CEO who co-founded Sustglobal, 3 years ago. Sustglobal’s AI-powered geospatial platform “empowers you to quantify climate-related risk and capture sustainable value”.

In order to provide useful data to companies Sustglobal first had to tackle a major problem. Namely how to transform petabytes of raw data from satellites into a useful financial signal.

Satellites can monitor dozens of climate data variables, but the quantity of data can be overwhelming. This is where machine learning techniques can be used to handle large amounts of data and help turn them into a useful financial signal.

Satellites monitor greenhouse gas emissions such as carbon and methane. This lens can be applied across widely dispersed mines, factories and power stations to provide company wide analysis of total emissions.

Sustglobal have been working with the European Space Agency to monitor the greenhouse emissions of commodity suppliers such as mining firms. Monitoring these emissions allows independent verification of whether environmental targets have been met.

When a mining company states that it has cut carbon emissions in its mining operations, rather than relying on a report from a company, the claim can be checked independently using satellites.

This kind of accurate and up to date information is crucial for the successful implementation of any potential carbon tax. Governments will need accurate up to date information on emissions levels in order to assess tax levels.

Disaster Recovery

🔥As the number and frequency of wildfires, floods and extreme weather events rises driven by climate change, satellite imagery can provide a real time picture of extreme weather events which can be invaluable in responding to disasters.

👩‍💻Real time information can also be combined with historical data to create scenarios of how these climate risks will unfold in the future. This information is increasingly important to banks and other companies who wish to understand their exposure to climate risks.

Climate Risk

Climate Risk has a data problem. It is impossible to see into the future, but knowing how and where extreme heat, sea-level rise and flooding will occur is central to this new field.

🛰️Satellite data can be transformed into a powerful financial signal. Satellite analytics can show where natural disasters such as flooding or wildfires are more likely to occur. This can be overlaid with information on company assets such as crops, mines, factories and housing. This way firms can understand which assets are threatened.

🏦Banks, insurance companies and the corporate sector are eager to learn how climate risks will impact their portfolio of assets. The emergence of the Taskforce on Climate Related Financial Disclosures (TCFD) has shifted perceptions and within a decade measuring climate risk will be a fixture in every major company.

🌊Gathering granular data on how company assets will be impacted by sea level rise, fires, floods will become standard. Right now there is a great deal of uncertainty around how accurate climate risk models can be. But it is certain that demand for climate risk data is only going to increase.

While it is impossible to know exactly how climate risks will play out in the future. Predicting where a devastating fire will break out or how long a drought will last is very difficult. But it will be possible to create more accurate scenarios of how climate risks will play out in reality.

Foliage Detector

🦅Enjoying a bird’s eye view of the world also means that satellite data can be used to monitor crop coverage and estimate yields. In a similar fashion forests can be monitored to measure deforestation, forest fires and vegetation and even the risk of trees falling onto power lines and causing outages.

This was satellite data can act as a referee for environmental governance. When companies state they are committed preventing deforestation or that they are not building on land which is exposed to climate risk.

These claims can now be tested using satellite imagery. The rise of ESG reporting been tainted by claims of greenwashing, that companies are hiding their true environmental impact. Satellite data can back or disprove these claims or dismiss shaky assertions with real time evidence from the ground.

Verifying Supply Chains

Understanding complex supply chains is increasingly important for ensure high Environmental, Social and Governance (ESG) standards. The supplies of raw materials, labour and manufactured goods is crucial. The extraction of metals, minerals and other natural resources which damage the environment could tracked by satellite. This could give assurances about the quality and integrity of supply chains.

Consumer goods giant Unilever has piloted satellite technology to ensure its suppliers are not contributing to deforestation. By taking GPS data and watching for movement around

Conclusion

Mainstream geospatial capabilities enabled by space technology and data science into financial decision-making globally. The emergence of this field is likely to spark many new products, innovations and companies.

What is especially exciting about geospatial finance is that it is still in its infancy. Geospatial data can still still be used for many applications where understanding changes in the natural world or built environment are important.

Some commentators have compared Geospatial data to mapping the human genome. Instead of mapping humans genetics satellites can comprehensively map and monitor the earth and how humans are changing it to an unprecedented degree.

Geopolitics of the Clean Energy Transition

How metals and minerals will replace oil & gas as the world’s most valuable resources.

Why is the price of lithium soaring this year?

⛏️Why are the US Government backing a potentially highly polluting refining process in Texas and the Pentagon investigating so called biomining to secure supplies of rare earth metals?

📈Why is the demand for copper projected to rise rapidly in the next few decades?

The world economy is facing its biggest ever transformation as countries attempt to rapidly decarbonise in a bid to prevent runaway climate change. There will be a global energy transition from fossil fuels to renewable energy. This means solar and wind, but also hydrogen, geothermal and possibly nuclear all displacing oil, gas and coal.

Energy transition will bring in its wake huge shifts in geopolitical power. For many this transition will be painful. Many nations such as Saudi Arabia, Algeria and Norway will see the central pillar of their economy disappear along with it much of their power, influence and wealth. The countries that rapidly adopt new technology and adapt to this new world will emerge the winners.

Energy transition

⚡🛢️⛽Coal, oil, and natural gas remain the cornerstone of global energy. But change is happening, the global energy transition is well under way.

Recent decarbonisation pledges from nearly every country in the world.

The falling cost and efficiency of wind and solar power, plus the emergence of other alternatives such hydrogen means that a clean energy future is possible.
Banks are turning away from fossil fuels as the long terms risks and costs become clear.

Energy transition means closing dirty coal fired power stations, refineries, and oil wells in favour of offshore wind farms, replacing petrol cars with electric and peppering roofs with solar panels.

Of course this change will be slower than many would like. The transition will be a bumpy ride, but it does now feel inevitable.

Rather than relying on physical inputs of coal, gas, and oil renewable energy is technology based. Solar panels with silicone cells, ever more efficient wind turbines and electric batteries.

Tech Competition

🔋China leads the race in terms of electric batteries. In 2021, 148 of the world’s 200 lithium-ion battery megafactories in the pipeline are located in China. Whereas Europe and North America have only 21 and 11 megafactories in the pipeline.

Electric batteries and the components for wind and solar require metals and minerals, from lithium, copper, cobalt, nickel, manganese and a host of rare earth metals. As the world scales up its use of clean energy demand for these materials will rise rapidly. Demand for lithium is expected to rise 40 fold by 2040 as the global energy transition accelerates.

The world will move from an energy intensive world to a mineral intensive one.

This fundamental change has massive consequences for mining, energy and geopolitics. The world can go from harvesting and processing 13 billion tonnes of fossil fuels a year to mining 43 million tonnes of critical minerals.

Currently the production of these critical materials is focused in just a few countries. Cobalt mining is 60 – 70 percent concentrated in China and the Democratic Republic of Congo (DRC). China dominates the dirty, polluting rare earth metal refining sector (90 percent of the market).

Rare Earth Materials

🪙Realising China’s dominance in the rare earth metals sector represents a major strategic weakness, forcing the US to react. US Presidential Executive Orders and the recent US$ 1 trillion infrastructure bill have identified and attempted to rectify these supply chain weaknesses. The government recently pledged US$ 30 million towards a rare earth refining facility in Texas. Other measures are sure to follow.

Tensions over mineral rights have surfaced in Greenland and Brazil where US and Chinese interests have clashed over the supply of minerals.

Any country that dominates the supply of critical materials can if it chooses cut or restrict the supply of materials. This would cripple the green tech industries of any opponents or rivals.

Global Competition

🌏Overseas the US and western allies are looking to secure supplies of critical metals and minerals. Countries from Kazakhstan, Mongolia, to Tanzania, Zimbabwe and Malawi all have potential for mining rare earth minerals. The competition between the US and China means that any potential location will be carefully vetted as a future geopolitical flashpoint.

South America and Lithium

🌎South America is also a rich source of lithium. The metal is in demand thanks to its use in electric car batteries. Mining companies have flocked to the so-called lithium triangle of Chile, Bolivia, and Argentina to secure mineral rights in the region. Large and relatively easy to reach deposits made the region a hotspot for both western and Chinese firms.

However, South American nations are not passive hosts. Resource nationalism will always raise its head to thanks to the decades of accusations of exploitation aimed at US firms. As lithium rises in value governments will more tempted to take more control over such an important asset.

Despite being a relative newcomer China is the biggest trade partner for many countries in South America. Chinese firms will compete hard against US or Western interests for mineral resources, particularly those which feed critical industries back home.

King Copper

⚡Copper is also essential for the global energy transition. In order to meet decarbonisation targets the world needs to electrify rapidly. Plugging growing energy demand into a renewable powered grid can decarbonise power sectors rapidly. An easy win for green targets. Electrification also means heavy use of copper for wiring.

No surprise then that copper demand is expected to rise by over the next decades. Wood Mackenzie estimates this will take US$130 billion to provide another 6.5 million tonnes per year. Major copper producers are already predicted to see falling market share.

The race is on to locate new sources to match future demand. The problem is that mining is a very slow drawn out process. The planning and development of any mining project can take years or decades until anything is actually produced.

Metal Heads

Geographical concentration of production could put lithium and other metals in the hands of just a few producers. This will give the miners and refiners significant monopoly power, potentially allowing them to control the supply and price of critical materials. In turn this will push up the cost of global energy transition.

Another big problem of concentration is that any disruption through conflict, trade disputes and increasingly extreme weather events could disrupt the flow of metals to factories. Any disruption has a knock on effect delaying global energy transition.

Dirty Dangerous and Difficult

🌲Global energy transition is supposed to be environmentally friendly. Cutting out fossil fuels from the global energy mix will be decarbonise the sector, but what about other environmental factors? Unfortunately, mining is a notoriously polluting sector.

Monitoring and measuring the sustainability of supply chains and mines will come under ever greater scrutiny. The pollution and human cost of refining rare earth metals is one reason countries have not flocked to host these facilities. Inner Mongolia in China is host to huge toxic lakes full of black sludge, the by-products of rare earth metal refining.

Manufacturers of green tech do not want their credentials undermined by dirty polluting mines that abuse labour. This should put pressure on miners to clean up their act, but this could also push up the cost of extraction. However. these constraints will also spur innovation.

Recycling the electrical revolution

Recycling electric batteries, wind turbines and electrical goods has become an industry in itself as entrepreneurs try to salvage the most valuable parts of clean energy technology. An industry that is pushing sustainability does not want a dirty underbelly of waste.

At the same time demand for transition metals and minerals will push mining companies to look for new sources in different regions. This will lead to a hunt for metals and minerals that feed the energy transition that will be complicated by geopolitical competition.

Geopolitics of global energy transition

🌏The geopolitics of a mineral intense world will also look very different.

Firstly, marginal oil producers where production is expensive are likely to go out of business first when oil demand finally wanes. Places like Venezuela where the cost of production is high and the quality of oil low will be first to go and along with it any oil based geopolitical leverage.

Supply chain disruptions will not be severe as seesawing oil demand. A tight lithium supply will only impact building new electric batteries not existing vehicles. Oil requires near constant supplies to avoid disruption.

Shifting countries away from being petro-states will help them in the long run. Oil often poisons the politics of a country and creates a parasitic mono-economy.

Saudi Arabia and Gulf states will retain their power the longest. The cost of production in this region is much lower, so oil production can be sustained for longer.

What comes next?

What will replace the era of fossil fuel geopolitics. Countries that control the mining and refining of critical minerals such as lithium, cobalt and copper will gain newfound power in the energy transition. Rocketing demand and concentration of supply will create lots of talk about the “Saudi Arabia’s of lithium”.

The shift to a mineral intensive world will hand greater power to the countries and companies that can control the supply and processing of critical minerals and metals. The rest of the world will be keen to ensure that there are reliable supplies of critical materials to ensure a smooth transition.

Key Takeaways:

Demand for the raw materials that will build a climate economy: Copper, cobalt, lithium, graphite and rare earth metals will enjoy unprecedented demand over the coming decades. More solar panels, electric batteries and electrification means more mining for critical materials and less fossil fuels.
Mining is a dirty business. There will be major opportunities to help mining companies improve their environmental and social performance.
There is a risk that a lack of or the high cost of raw materials such as copper will stop the world from hitting decarbonisation targets. Copper projects can take years to become productive.
Demand for metals such as lithium combined with falling demand for oil and gas will shift global geopolitics. Lithium producers will enjoy greater bargaining power as China and western countries compete over supplies. Key oil producers such as the Gulf States will see their power grow in the medium term as marginal oil producers are forced out of business as demand falls.

A Guide to Climate Tech Finance

The news in 2021 has highlighted climate change like never before. Storms and hurricanes wreaked havoc across the US as far north as New York. Floods in Germany and temperature records across the globe were smashed. Public opinion has shifted towards a demand for more action.

In Germany the Green Party looks set to play a key role in government following the recent election. The US administration passed a flawed US$ 1 trillion infrastructure bill which promised funds for electric charging points, climate resilience and support for decarbonisation.

At the same time governments, businesses and entrepreneurs are realising that there is huge potential in zero or low products and services. Climate tech is cross sector cutting. Nearly every facet of life needs to be decarbonised rapidly if the world is to avoid a climate crisis. This is attracting serious money from venture capital to multilateral banks to giant corporate investors.

BlackRock Chief Executive Officer Larry Fink described climate investing: “I look at this as one of the greatest investment opportunities over our lifetimes.”

Choosing to decarbonise early is a competitive advantage. Carbon emissions will become more costly and less socially and legally acceptable.

Climate tech promises to harness technology to accelerate the transition to a low carbon world. Renewable energy firms are the most visible climate tech champions. But there are many other ways to reduce carbon, through artificial meat, green chemical companies, and low carbon construction firms.

Recent Global Shifts Include:

Election of US President Biden who has acknowledged climate change as the critical burning issue of the day.

China, US, Japan, EU, UK and Korea have all recently promised carbon neutrality in the next 30 years. Of course, political promises can be reneged or ignored, but the political momentum is clear.

The pandemic changed perceptions about the environment, cut carbon emissions (at least temporarily) and showed the world that rapid social and economic shifts were possible and for some desirable. It is much harder for companies and governments to make the excuse that change is too difficult, or that reforms must be slow.

Many companies have followed up on their Paris Alignment pledges and committed to go carbon neutral, car companies saw the writing on the wall and the shift to electric cars became real. Many governments have set targets and dates to achieve zero carbon economies.

Financing Climate Technologies

Money is gushing into Climate tech right now.

Below I look at how climate technology is financed and how this could change in the future. Funding for climate tech is as varied as the sector itself which is largely defined by its goal. Angel investors, venture capital and government funds are heavily backing zero-carbon technologies.

A recent PWC report identified around 2700 investors backing around 1200 start-ups. The industry went from around US$ 418 million funding in 2013 to around US$264 billion last year. This might seem a lot. But the reality is that this number needs to be much higher for technologies to make a dent in reducing carbon emissions.

The scale of change required is awe inspiring. Entire sectors such as transport, infrastructure and energy require complete transformation and billions of dollars to make it a reality.

Petrol driving cars need to be replaced, energy systems shifted from fossil fuels to clean energy. Sectors such as construction which many do not even associate with carbon emissions will have to shift to using low carbon materials and processes.

The scale of this transformation means that the clean tech sector has the potential to grow and grow. Its rise will emulate that of social media in the last decade and its impact will exceed it.

Capital Needed

But for this to happen the entrepreneurs and businesses need funding to match their dreams. Like all new sectors climate tech is risky.

Many new innovations will not work as planned, some will find it hard to scale and of course many start ups will be picked off by rivals or larger competitors.

Climate technologies are also often capital hungry, developing and promoting new technologies can be extremely expensive.

Financing the first deep sea shipping lane powered by methanol or green ammonia will cost US$ 700 million in up front capital investment.

Venture Capital

Venture capital is now heavily backing the climate tech start up scene. According to one survey start-ups raised US$ 16 billion across 250 deals across the first half of 2021. This also represented a 50 percent increase on last year’s figures.

Venture capital firms are of course a fixture in the tech scene and the lure of climate focused start ups has grabbed their attention.

Well known funds such as Sequoia Capital which backed many of Silicon Valley’s biggest most successful stories are now backing climate focused ventures. Other VC firms like Clean Energy Ventures specialise in just climate tech.

Others like The Engine a MIT backed fund take a different approach providing long term capital to ventures trying to solve the world’s toughest problems. Climate change among them.

Start-ups are the most exciting and innovative creators of climate solutions. But established companies have the size and reach to really push decarbonisation.

There are many net-zero levers: alternative proteins, renewable energy or green construction. Climate tech is cross sector cutting which means that it will attract money from a variety of different sources, not just funds with an energy focus.

Corporate Venture Capital

Corporate Venture Capital is another rapidly growing source of finance for Climate Tech.

The funds have been created by major corporations who wish to back a fast-growing sector for financial and strategic reasons. The big tech firms like Amazon, Google and Microsoft have all seen the value of net-zero and backing their own climate tech finance divisions.

This could be to gain market share in emerging technologies or to counteract the fact that major companies are traditionally poor innovators.

Firms that have created climate tech funds include Chevron, Maersk, Microsoft and Unilever. These funds are backing firms which are pushing zero-carbon solutions such as Afresh which uses AI to unify logistics arrangement in delivery and transportation to increase efficiency and reduce waste. Chevron have backed Eavor a Geothermal technology company which hopes to drill deep underground to tap geothermal energy.

The king of the climate tech capital pile is Breakthrough Energy Ventures. Founded by Bill Gates over 5 years ago it has raised over US$ 2 billion for climate technology start-ups.

Emerging Markets and Traditional Banks

In emerging markets, multilateral banks such as the Asian and African Development Banks, the World Bank and European Investment Bank are major backers of climate finance.

In 2020 Multilaterals backed US$ 38 billion in investment into the climate sector. Much of this will be backing the renewable energy sector, energy efficiency and green infrastructure projects. Multilateral banks are also backing climate adaptation and resilience projects.

In a similar fashion Temasek the Singaporean sovereign wealth fund in conjunction with giant investment firm Blackrock are also getting in on the act. The two investment giants created a venture called Decarbonisation Partners which is placing US$ 300 million into a seed fund for climate tech.

While traditional Banks are clearly a major source of finance they typically back well established renewable companies rather than innovative tech firms.

The emergence of the Taskforce on Climate Related Financial Disclosures (TFCD) has forced firms to disclose their strategy in adapting to a changing climate (with the recognition of climate risks), but this has also made firms think about how they can take advantage of the transition to a zero carbon.

This has seen mainstream banks measuring how climate risk will impact their balance sheets. Spelling out financial risk in this way will push banks to back climate friendly projects and companies

The green bond market has exploded in size over the last few years. US$269 billion was raised in green bonds in 2020. The market is led by the US, Germany and France, most of money raised will go towards green mortgages, renewable energy and transport (such as railway companies).

The green bond market tends to be focused on financing established climate technologies. However, funds that are backing green mortgages, low carbon buildings and other green projects and fall under the green bond taxonomy can directly spark demand for new climate technologies.

Looking to the Future

Financing climate tech does not have the luxury of time. The sector needs to see a rapid increase in financing levels, this means that other sources of finance need to be tapped. Firstly, governments need to ensure that policy shifts on decarbonisation are matched by action.

For example, passing laws that encourage green construction, taxes on carbon or even meat. These measures will spark demand for climate friendly technologies.The private sector should be following the lead of venture capital and corporate VCs and backing more innovative climate tech firms as well as established technologies.

In the news

Climate Opportunities

Green growth offers opportunities for South Africans. The shift to renewables and a net-zero world creates new industries with often highly skilled positions much needed in South Africa and elsewehere.

Green economy growth is a silver lining for the planet and job-hungry South Africans (iol.co.za)

The Singapore Exchange makes climate related financial related disclosures reporting mandatory. As TCFD reporting becomes the norm the opportunities for climate risk reporting will grow. The sector will thrive and mature as reporting becomes more widespread.

Singapore Exchange proposes mandatory climate reporting in key sectors from 2023 | S&P Global Platts (spglobal.com)

Chevron plans to spend US$ 10 billion on renewable energy and reducing its carbon footprint. But is this just greenwashing and a reaction to recent actions by activist investors?

Chevron to spend $10bn on clean energy push | Financial Times (ft.com)

Climate Risks

A new threat from climate change. As ice melts it could set off huge tsunamis by reducing the weight on the crust below and unleashing intense seismic activity.

Chevron: Despite the company backing climate solutions with one hand it remains very much a traditional fossil fuel company. The oil and gas sector is increasingly fighting off activist investors that are challenging plans and pushing these giant companies to decarbonise.

Chevron prepares to head off challenges at investor presentation – Institute for Energy Economics & Financial Analysis (ieefa.org)

Could restoring Woolly Mammoths via gene editing be a way of restoring lost biodiversity caused by climate change. It does not stop the root problem but open up ways of restoring lost species once habits are restored or rewilded.

How Colossal sold investors on a quest to resurrect a woolly mammoth | TechCrunch

All talk of economic costs in addressing climate change tend to ignore the long-term costs of doing nothing. Climate risks in India, extreme heat, flooding and drought make a mockery of any attempts to protect the economy today, particularly if climate changes further disrupts the all important monsoon.

Economic impact of climate change on India | LinkedIn

Nature’s Fury: How can the world prepare for more natural disasters

The verdant hills of Tizi Ouzou in Northern Eastern Algeria are normally covered in olive trees and scattered with small villages. But in August 2021 the region was engulfed by multiple forest fires which reduced the trees and villages to ashes.

The Algerian government were unprepared and despite a large military budget was forced to borrow fire fighting planes from France to try and combat the fires. Extremely high temperatures of up to 46 C and strong winds created the perfect conditions for forest fires.

The flames engulfed left many homeless and cost the lives of 9o people. The fires caused more damage than all Algeria’s forest fires in the last decade combined.

The government was quick to blame arsonists and separatist groups, ignoring the role of climate change. Perhaps influenced by the fact that 90 percent of Algerian government revenues come from oil and gas.

However, many Mediterranean countries such as Greece, Turkey and Italy have been affected by record breaking temperatures and devastating forest fires this summer. Indicating this is a regional issue which will only worsen over time.

As climate change’s grip tightens across the world we will face a new unprecedented wave of natural disasters. Below I look at what this means and how governments, NGOs and businesses can start planning for the worst.

Defence against the Elements

Since the dawn of civilisation humans have constantly developed technology to protect themselves from the elements and natural disasters. From simple shelters to robust modern buildings, irrigation systems to earthquake proof skyscrapers humans have discovered ingenious ways to protect themselves from an often hostile environment.

But now nature has returned to reclaim a debt. Climate change influenced conditions have become more apparent over the past few years. The frequency, severity and cost of floods, storms and extreme heat have all increased sharply the world over.

Temperature records have been smashed across Canada, Southern Europe and the Middle East. Every year carbon dioxide levels continue to increase unchecked natural disasters will continue to increase in strength and number.

Warmer weather creates more moisture in the atmosphere. This moisture creates the fuel for more storms, hurricanes, heavy rainfall and typhoons. Rising sea levels (thanks to melting icecaps) along with storms creates the conditions for coastal surges and the encroachment of seas into ocean facing cities.

Climate change mitigation measures remain in effect stalled and a zero-carbon world is a distant dream. This means that the world must plan for more natural disasters.

Recent devastation in Germany and the US reminded us that rich countries are not immune to natural disasters. Poorer countries are likely to suffer more simply because they lack the resources to prepare and recover from these disasters. Below I look how rich and poor countries alike should be preparing.

How to Prepare for Natural Disasters

Firstly, identifying where and how disasters will strike is critical.

Climate risk forecasting is an uncertain science, but major strides are being made in this field. Satellite data now provides and unprecedented real time insight into what is happening in terms of climate and weather across the globe. We can understand climate patterns, changes in land usage and real impact of natural disasters ever more clearly.

This information combined with historical data to determine how climate risks, drought, extreme heat, flooding risk and sea level rise may play out over a particular region.

Preparing for a New World

Secondly, governments, civil society and where necessary individuals need to organise and begin preparing for a more unstable climate.

While many countries are well prepared for “familiar” disasters. Climate chaos will throw up more extreme and frequent and often unfamiliar disasters. New York experienced widespread flooding due to storms twice in a decade. The city was unprepared for this kind of emergency, its infrastructure not built to withstand such huge volumes of water.

Governments need to bolster disaster relief agencies, police forces, the military and local governments to tackle disasters before they strike. Recent forest fires in Turkey left the government caught the government by surprise making the impact of the fires far worse.

The Turkish Government’s failure to prepare and respond to forest fires was linked to falling political support. The Turkish President was widely mocked for throwing out bags of tea from a car to people left homeless by forest fires.

Collaboration is key. By working and communicating effectively together before there is an incident, many different organisations can be ready when disaster strikes. Successful coordination will mean each organisation can focus on their own specific role without fear they are not fulfilling their duties. Naturally many plans fail when they meet reality, but the very act of making a plan is an end itself.

As President Eisenhower said: “Plans are worthless, but planning is essential”.

Rethinking Infrastructure

Thirdly, another form of planning is rebuilding infrastructure for the age of climate change. Extreme heat, floods and a hungry rising sea will all exact a toll on our existing buildings, roads and ports. Infrastructure will have be rethought and rebuilt with climate change in mind or it will face rapid obsolescence as climate related disasters take their toll.

The first step to rebuilding infrastructure is a change in mindset. The days of predictable climate are over and planners need to recognise this fact. So many regions and cities were built for 1 in 1000 years or 100 year floods. These places are now experiencing these once a decade or more.

Houston has experienced three once in 500 year storms in the last 40 years. When key infrastructure such as power and water is knocked out in a underprepared city, the consequences are devastating.

Now the emphasis should be incorporating flexibility and resilience into infrastructure planning. This could mean designing roads with smart signalling systems which can used when the it floods.

The Netherlands for centuries lived with the threat of the sea and much of the country below sea-level. The Dutch built dykes and dams to withstand huge storm surges and floods. In order to prosper societies will need to build infrastructure that can live with these new extremities.

Different infrastructure types

Transportation is highly vulnerable to climate change. For example extreme heat can quickly ground flights and strand passengers. High temperatures make is dangerous for planes to take off because it affects the lift that allows aircraft to fly. Roads and rail will also suffer in high or low temperatures. Melting tarmac and warped rail lines or cracking under pressure in icy conditions.

Electric grids are also highly vulnerable. Extreme heat increases demand for air conditioning which place high demands on grids. At the same high temperatures put pressure on equipment (not designed for such conditions) which can result in blackouts.

Water treatment and supply systems are also highly exposed to flooding, drought and extreme weather. Any outages to wastewater services are often followed by outbreaks of water borne diseases such as e-coli and cholera. This is particularly true when outages are combined with flooding. Developing countries are at additional risk as they often lack the funds to build resilient waste water systems.

Atlantis as reality

A sea level rise of just half a metre will put over 500 coastal cities under threat by 2050. For cities already exposed to hurricanes and typhoons this risk will be even higher as these cities will be exposed to storm surges.

Careful planning is required to defend against the sea. Barriers, sea walls, pumps and natural defences like mangrove forests can all slow the encroachment of the sea. But as the seas rises the cost of these defences will be weighed up against abandoning coastal settlements altogether.

The Indonesian capital Jakarta is steadily sinking as it subsides into the ground. Millions of residents in Jakarta pump groundwater from below the city which causes it to sink. The Indonesian government have decided to move the capital to Borneo in attempt to escape the floods and overcrowding that afflict Jakarta.

What are the Solutions?

Climate chaos will force the world to adapt. Extreme conditions will break much of our existing infrastructure forcing cities to retreat or be abandoned to the elements. Other cities with greater foresight and resources can rebuild infrastructure now. Rethinking everything from roads to telecommunications to utilities to withstand extreme heat, or regular flooding will present the best chance of success.

Governments can act by preventing construction in vulnerable areas and mandating climate risk planning in all large infrastructure projects. They can also play a key role in developing early warning systems and coordinating disaster preparations.

Capital also needs to be deployed to rebuild infrastructure to make it more resilient. Governments and multilateral Banks will also need to create larger recovery funds and nurture disaster recovery insurance options particularly for poorer countries who will have to recover from multiple disasters.

Madagascar

The current climate induced drought in Southern Madagascar is an example of what to expect. Thousands of people in Southern tip of the island have been pushed to the brink of famine as multiple harvests have failed. Local people have been forced to eat locusts and beg. The drought has left 1.1 million people experiencing food insecurity.

Madagascar is one of the world’s poorest countries. Its position is made worst by the lack of tourist revenue thanks to the global pandemic. On its own Madagascar lacks the resources to alleviate the suffering. The World Food Program has stepped in to try and provide supplies but faces a tough battle in reaching people during a pandemic.

Hurricanes, earthquakes, flooding, typhoons, volcanos, extreme heat and cold and the many other challenges the natural world throws up have all existed long before human civilisation. Now these phenomena threaten the world as never before in spite of the ingenious infrastructure devised to protect us from it. Climate change acts as magnifier, making existing risks more dangerous and frequent.

Ultimately, more resources running into trillions of dollars on a yearly basis will have to be diverted into climate resilient infrastructure, adaptation and disaster management to face a chaotic world.

A Guide to Climate Tech: How Technology, Innovation and Entrepreneurs Can Build a Zero Carbon World

Tiny brightly coloured microbes live in Yellowstone park’s volcanic springs which can thrive in incredibly hot temperatures up to 235 C. These so called extremophiles are bright yellow, orange, blue and survive and by turning light into energy. Scientists have long been fascinated by their unique habitat and properties.

The microbes caught the eye of Thomas Jonas the CEO of Nature’s Fynd. The company now takes these microbes and with the aid of water has created a process which can turn sugar into protein. This protein can then be used as the basic building block of an artificial meat product.

Nature’s Fynd was founded to tackle greenhouse gas emissions through food production. The company can produce “meat” with 99 percent less land and greenhouse gases than the livestock equivalent. Nature’s Fynd is part of new wave of companies focused on utilising new technologies to reduce carbon emissions.

Why Climate Tech is a Critical Sector

As the threat of global heating grows the need for solutions grows more urgent. Climate tech is an industry focused on solving humanities biggest problem. 2021 has seen record breaking temperature across the world along with more instances of extreme weather, floods, wildfires and hurricanes. From rocky beginnings as cleantech a decade ago which saw a lot of money pumped into firms but few success stories (Tesla a notable exception).

Now a new wave of exciting companies is emerging which are utilising technology to transition society to a zero carbon future.

Proterra is a leading provider of heavy electric vehicles, producing buses, trucks and shuttles all with zero carbon emissions. Founded in 2004 the company is taking advantage of the fact that more companies and governments are switching to electric vehicles for their fleet. As the number of charging points and policies favouring electric vehicles grows so will the market for these vehicles.

Each degree of warming will make climate tech a more attractive sector. As the problem of global heating grows, the solutions needed will become more urgent.

Pachama allows companies purchase carbon credits and restore nature through forest projects. They use artificial intelligence to monitor the forests and protecting older trees and growing new trees to restore habitats.

Aclima measures greenhouse gas emissions and pollutants at a local level which allows its customers to identify where and how they are contributing to greenhouse gas emissions, giving them the information they need to take remedial action.

Climate tech firms can be divided into seven broad areas:

Creating zero carbon transport (electric vehicles) or mass transport solutions.
Developing solutions around agriculture, farming and forestry which reduce emissions or even create negative emissions (this could mean a venture like Pachama or vertical farming solutions).
Decarbonising the built environment, firms that can decarbonise heating systems or make them more efficient. Or firms that can that make buildings with low carbon materials come under the climate tech umbrella.
Renewable energy companies, the most obvious solution for many observers, this can mean the production of solar panels and wind turbines or firms which can optimise energy efficiency, distribution and usage.
Companies which decarbonise industry through new techniques such as low or zero carbon cement.
Companies which utilise machine learning and artificial intelligence to make use of data sources such as satellite imagery, physical sensors and temperature readings which create a detailed information around the rise of climate change.
Carbon Capture and Storage is the most uncertain and unproven climate tech, but if deployed successfully could suck carbon out of the air and store it safely. Reducing the amount of carbon in the atmosphere could represent a silver bullet for climate change. But CCS has yet to be proven at scale.

The huge of scale of change required to get the world to net-zero is breath-taking. Estimates run into US$5-7 Trillion over the next couple of decades to hit current 2050 targets. The good news is that the sector is fast growing. In 2020 companies in Climate Tech raised capital three times faster than artificial intelligence. PWC put this figure at US$16 billion, a large amount but tiny compared to what it required.

How Disasters Could Drive the Climate Tech Sector

Perhaps ironically what will drive more investment and more demand for the products is each new piece of bad climate related news, every natural disaster will raise awareness about climate issues. The many pledges made at international conferences and by individual governments are also driving change.

For example, the EU recently published its sustainable finance taxonomy defining climate friendly activities. While many of the pledges are flawed and some may end up unfulfilled or ignored it does create a powerful sense of momentum.

Global giants Microsoft, Unilever and Amazon have all seen which way the corporate wind is blowing. These firms have all set up venture funds to back climate tech start-ups joining a stampede of new financial backers looking for the next growth story.

43 Unicorns and Counting

The business opportunities in this space are likely to rival previous tech booms and produce new Unicorns (tech firms worth a US$ 1 billion or more) and major new companies. Already there 43 Unicorns in the Climatetech sector, but many start-ups will get absorbed by rivals or simply not survive.

Climate tech differs from Cleantech (which experienced a boom/bust cycle a decade ago). Climate tech is focused on activities which reduce carbon emissions. Cleantech is broader and includes activities which help protect the environment such as water filtration or recycling, but not necessarily reducing carbon emissions.

Why Now? Climate Tech has hit a critical inflection point thanks to various factors:

Both demand from consumers and regulation from governments is driving the corporate sector to find new low carbon alternatives. The Paris Agreement, the EU Sustainable Taxonomy and the Task Force for Climate Related Climate Disclosures (TCFD) are all relatively new policy initiatives which

Energy is the most obvious sector for climate tech to disrupt. Solar and wind energy has already made a major impact on global energy production. Falling costs over the last decade (85 percent in the case of wind turbines) means that renewable energy is competitive with fossil fuels. But climate tech is wider than just energy production. For example, battery storage for cars or on an industrial level is increasingly a vital driver of decarbonization.

More efficient energy storage means that renewables become more effective as they can avoid the vagaries of the wind and sun. Grid management tools using machine learning and other techniques can also make for more efficient energy use. The market for electric vehicles pioneered by Tesla and the batteries which drive them is set to grow rapidly as car manufacturers shift production and governments look to ban their use.

Climate tech solutions can be divided into the vertical which deal with carbon emissions in one industry. For example, reducing the carbon loss from soil through precision agriculture or manufacturing process to make low or zero carbon concrete.

Alternatively horizontal solutions address carbon emissions across multiple sectors. Electric car batteries are a good example of this as they have allowed the car industry to shift to electric cars (EV), this encourages the use of solar and wind energy to produce the electricity to run the cars.

Machine learning (ML) is another horizontal tool which can cut across boundaries and solve problems. ML uses algorithms which can perform a task normally done by humans, such as identifying pictures of friends on social media, act as a IT support chat bot to solve software issues or collect and identify patterns in satellite imagery.

The seven broad areas in Climate Tech are outlined below:

Transport

Moving people and goods by land, air and sea takes up a lot of energy. Most transport is run on oil products which of course leads to greenhouse gas emissions. It makes sense that many climate tech firms are looking to shift and upset this sector.

Electric vehicle production whether this be car, bus or truck is a highly visible sign of climate tech. Of course, the source of the electricity is key. If the electricity is supplied by fossil fuels, then electric cars are not climate friendly. Electric vehicles are only as green as the source powering them. The production of electric vehicles can also be problematic thanks to the need for rare earth metals in the battery which can be environmentally destructive.

NIO is a Chinese car maker which focuses on making Telsa like electric autonomous vehicles. NIO are luxurious vehicles with ultra modern autonomous driving features. With many countries promising to phase out petrol driven cars, manufacturers are shifting to electric models.

Food and Agriculture

Farms and agriculture are increasingly recognised as both major source of greenhouse gas emissions (around a quarter of all emissions) and a difficult problem to solve because of humans need for huge quantities of food and in particular methane producing livestock. Many policy initiatives are unlikely to impact on agriculture as it has been exempted from carbon pricing.

This challenge has resulted in many of the most climate friendly and innovative solutions. Meat production is a major and growing source of greenhouse gases (especially methane) and there many ethical concerns around livestock farming. The answer is a global shift to a plant based diet.

But of course this desire clashes with people’s love of meat. Food production companies such as Viva and Beyond Meat have used technology to create alternative proteins – which taste and appear like meat or fish but are plant based. These products typically represent 90 percent less carbon emissions than their meat equivalents.

The market for plant based products has grown rapidly. The number of vegans and people demanding more plant based foods has grown rapidly in many western countries. The Michelin Guide recently awarded 81 stars to vegan and vegetarian restaurants. A powerful symbol that the world is taking vegetarian food seriously.

The earth and soil and peat are also a major source of carbon storage and depleted soils and. Regenerative agriculture can mitigate climate change and involves activities which improve soil health and sequester carbon and enhance water retention.

Regenerative agriculture includes practices such as cover cropping and conservation tillage which farmers have been doing for many years but too much of modern farming has become destructive to the land and the result in billions of tonnes of carbon being released from the soil each year

Gingko Bioworks are encouraging sustainable agriculture through testing strains of microbes. These microbes can be used to fix nitrogen in the roots of plants. This improves yields and reducing the need for nitrogen fertiliser (around 3 percent of global emissions).

Heavy Industry

Heavy industry is the fastest growing source of carbon emissions. The world’s demand for goods and products is seemingly never ending. Metals, concrete, fertilisers, plastics, and fertilisers all produce large amounts of greenhouse gases during their creation. Companies that can reduce emissions, reduce the amount of raw materials or used or make production processes more efficient can be classed as climate tech.

For example, 3D printing companies such as EOS and GE Additive can reduce transportation costs by allowing companies to print components reducing emissions. Hybrit is a Swedish firm which is trying to develop zero carbon iron and steel production from energy source to manufacturing process. Hybrit are experimenting with using hydrogen instead of carbon or coke to aid the reduction process. The reduction removes the oxygen from the iron which is a key part of making steel. Traditionally it is done in a blast furnace and relies heavily on coke (a major carbon source).

The Built Environment

Buildings emit large amounts of carbon thanks to heating and cooling systems emitting heat. But the materials that are used to build houses, factories, road, bridges and all our other infrastructure needs also involve large amounts of energy. Just cement production alone amounts to around 8 percent of all carbon emissions globally.

Efforts are underway to try and reduce this amount by trying to capture the carbon emissions during the manufacturing process. Ideas include switching to different more climate friendly fuel sources and by substituting materials such as using coal ash and blast furnance slag instead of clinker.

Through energy efficiency measures such as modern heating systems, improved insulation, plus smart heat management (often using machine learning) emissions can be reduced. These measures can be introduced into existing homes, but of course it is easier to be put into new builds. Green construction methods cut up front carbon costs through green materials.

Airex is a UK company which uses sensors and smart ventilation to help reduce heat demand in buildings. By cutting energy use Airex can cut fuel bills and using sensors can identify poorly ventilated areas and improve air quality.

Renewable Energy and Storage

Wind turbines and solar panels are the most obvious symbols of climate tech. Across the world renewable energy options are becoming more widespread and cheaper. Widespread industrial battery storage now promises to store energy and overcome the problem of when the sun is not shining or wind not blowing.

Hydrogen promises to be an exciting new carbon free energy source. Hydrogen burns like natural gas but without the carbon emissions. Excess renewable energy created in times of low demand can create hydrogen. This hydrogen can be then stored, transported and used as a zero carbon power source. However, this technology is still in its infancy

Climate Capture and Storage

The most uncertain, controversial, and risky climate tech area is carbon capture and storage (CCS). This is seen by some as the holy grail of decarbonisation but by environmentalists as a distraction from carbon reduction efforts.

Extracting carbon from the air and storing in the ground on a massive scale could theoretically solve global heating. Environmentalists view CCS as a risky distraction from decarbonisation which offers false hope. It is perhaps no surprise that funding has been patchy in this sector. The uncertainty and long-time horizons around CCS make it unsuitable for venture capitalists which prefer faster returns and more established technologies.

However, one source namely oil companies have been the biggest backers of CCS – although results have been poor so far. Expect these experiments to continue as if successful it would potentially allow oil companies to capture the carbon they are responsible for releasing into the atmosphere. Some have speculated that the technology for injecting carbon into the ground after capture uses similar techniques to the deep underground drilling that oil companies have such strong expertise in .

Climate Data and Analysis

The launch of many nano satellites has led to an explosion in the amount and quality of earth data captured. This has led to many new companies emerge to provide data on climate risks and forecasting. Companies like Jupiter Intelligence and Sust Global provide detailed information on physical climate risks for organisations. Understanding how the climate may create risks on a granular level allows clients to how extreme weather, drought, sea level rise and many other factors impact their assets.

Firms in this space use machine learning to process and sift through the huge amounts of data and turn them into actionable insights or financial signals. As well as climate risks this information can be used to monitor crop production, deforestation or reforestation rates (which can feed into sustainability ratings) and tracking natural disasters in real time to aid recovery efforts.

What’s Next?

For the success of Climate tech to continue there are several hurdles which need to be overcome. Firstly, financing needs to continue at an even faster rate, which in turn is dependent on the success of the companies involved in the sector.

Secondly the regulatory environment needs to shift further towards climate tech. This means actions like the phasing out of fossil fuel subsidies which prop up the oil and gas sector. It also means more initiatives like the EU sustainable Taxonomy which determines climate friendly activities. However, the problem is that if the legislation or regulation is too complex there is a risk that it will prove difficult for start-ups to navigate. This gives an advantage to larger firms with existing resources and could stifle competition.

Another limiting factor is lack of talented people in the industry. Climate tech is a young industry and its use of cutting-edge concepts like artificial intelligence means that there is a limited pool of workers to drawn upon. However, as the sector grows and the demand for such skills grow, so will the number of people attracted to it and they will develop the appropriate skills.

The rise of social media industry shows us how quickly a new sector can arise and dominate. The combination of new technology, the growing urgency of the climate crisis and the shift in the regulatory environment means that Climate Tech has a bright future.

Conflict and Climate

Climate risks should not be seen in isolation, rather as a series of shocks, which will overlap and overwhelm governments

Syria

Systemic Risk

How can organisations prepare?

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Electric Batteries

Chinas’ New Frontiers

An OPEC for Lithium?

Australia

What will the future bring?

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Global Rivalry

Taiwan

The Keys to the Economy of 2030

Supply Chain Security

2022 the year Climate Change hit home

Climate Fragility

Storm Clouds over Sharm el-Sheikh

China – Pakistan Nexus

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Enter the Dragon

The Geopolitical Race Heats Up

Environmental Damage

New Caledonia

What next for Nickel?

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Investigating how firms can protect and decarbonise the arteries of the global economy

Climate Risks

Identifying Climate risks along the supply chain. Climate risks can be either acute or chronic.

Acute risks are one off or recurring incidents

How should companies react

Understanding Supply Chains

Car Manufacturing

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Falling costs

SustGlobal

Disaster Recovery

Foliage Detector

Verifying Supply Chains

Conclusion

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Energy transition

Tech Competition

Rare Earth Materials

Global Competition

South America and Lithium

King Copper

Metal Heads

Dirty Dangerous and Difficult

Recycling the electrical revolution

Geopolitics of global energy transition

What comes next?

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Recent Global Shifts Include:

Financing Climate Technologies

Capital Needed

Venture Capital

Corporate Venture Capital

Emerging Markets and Traditional Banks

Looking to the Future

In the news

Climate Opportunities

Climate Risks

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Defence against the Elements

How to Prepare for Natural Disasters

Preparing for a New World

Rethinking Infrastructure

Different infrastructure types

Atlantis as reality

What are the Solutions?