@Risk

Yesterday, the Department of Defense released its Quadrennial Defense Review, and for the first time, this document –prepared periodically by the Pentagon to update Congress –addressed the threat of global warming, stating that climate change will accelerate instability and conflict around the world.

Specifically, the QDR identifies “crafting a strategic approach to climate and energy” as a key issue requiring attention:

Climate change and energy will play significant roles in the future security environment. The Department is developing policies and plans to manage the effects of climate change on its operating environment, missions, and facilities. The Department already performs environmental stewardship at hundreds of DoD installations throughout the United States, working to meet resource efficiency and sustainability goals. We must continue incorporating geostrategic and operational energy considerations into force planning, requirements development, and acquisition processes.

The report says that climate change will affect DoD in two broad ways:

It will shape the operating environment, roles, and missions that DoD undertakes. Climate change alone does not cause conflict, but may act as an accelerant of instability or conflict. According to the report, “Assessments conducted by the intelligence community indicate that climate change could have significant geopolitical impacts around the world, contributing to poverty, environmental degradation, and the further weakening of fragile governments. Climate change will contribute tovfood and water scarcity, will increase the spread of disease, and may spur or exacerbate mass migration.”

It will cause DoD to adapt to climate change impacts at its facilities and military capabilities. DoD is planning a comprehensive assessment of all installations. In one example, the report point out that the opening of Arctic Seas in the decades ahead means that the DoD must work with the Coast Guard and the Department of Homeland Security to address gaps in Arctic communications, domain awareness, search and rescue, and environmental observation and forecasting capabilities to support both current and future planning and operations.

Last week, I wrote about the release of Aon’s 17th annual political risk map, which for the first time included two new risk parameters: food and water insecurity, caused by population growth, production of biofuels, and changing climate. Plus last week, in a decision that was the latest in a series of major policy actions over the past year requiring more robust climate risk disclosure across various industry sectors, the SEC issued guidance requiring disclosure of climate change risks and opportunities.

If you haven’t started to consider how climate change risks are going to affect your business, it’s becoming more and more obvious that now is the time to begin.