Cat days of summer - July 2025
Why corporate intelligence teams matter, Texas floods, Alabama, a new model that's real useful, and how's Buffalo this time of year?
The past few weeks have been nights with little sleep and days of sweltering under some really uncomfortable heat! Air conditioning in London is mostly a joke, but you learn very quickly where there are islands of coolness and how to trek your family to and from these islands. The fact that this is contributing to my having far fewer hours in the week to spare to write is why this newsletter has been at a slower tempo of late. But have no fear, there’s definitely more content and interviews with awesome people to come!
But before we get into the climate security stuff, I want to go a bit into something I’ve been thinking about this for a couple of days now (without the help of ChatGPT, you should know). If geopolitics isn’t your usual cup of tea, skip this and go to the links!
I need to remind that these are my personal views only (if you need a further reminder, that’s at the bottom of this newsletter, if you’re reading it via email).
HSBC announced they disbanded their geopolitical risk team this week. There’s a fair bit of discussion in my circles as to why this has happened - much of which is unsuitable to share on this newsletter.
First, this is first and foremost a challenging situation for them and their families. Many of us know what this situation feels like, and I hope that they’re able to secure something quickly.
Taking a step back, it’s important to be reminded that geopolitics, as well as climate, are still fairly new themes for most banks and corporates to be grappling with in an in-depth way. There’s no broad consensus on how these teams should operate, and how they could move the needle in the organisation. This brings up the issue of whether there are gaps between what a) C-suites and senior leaders think risk intelligence teams bring to the table to help their P&L versus b) what value those teams see when they look in the mirror:
Do they exist to internalise outside information and “make it make sense”? Or is it to filter and pass on relevant information?
How are they meant to, and in practice, enabling business to happen? Is that by managing risk? Or is it by delivering a service offering e.g. talking to clients and at conferences, identifying new business opportunities, that stands out in a marketplace of ideas? I’d argue that understanding your organisation’s culture, markets, the time horizon which risk is perceived, and how your C-suite and Board frames geopolitics, as essential in determining how the look, flavour and profile of the team evolves.
How are they differentiated from other teams? Is it a distinct risk / theme they’re focused on, or does it overlap or “umbrella” over other teams’ areas of expertise?
Are they on target? How are priorities set? Is the scope of focus too broad or narrow? On the right things that matter for the organisation?
And finally, like in a burger, what’s in the secret sauce? Can’t I just read the news, download it, use ChatGPT/Gemini/Grok/Claude/DeepSeek? For me, AI is already the biggest disruptor to the value proposition and operating model of intelligence teams. It can enable existing analysts to focus more on problem solving and risk management v discovery, but I’m less convinced that AI doesn’t eat a sizable chunk of roles in the field for the coming 2-3 years.
Do the people that matter understand what they need do with the stuff that’s produced and why?
If there’s too many “I don’t knows” to the above questions, then that should be a real concern. Business cycles come and go, and restructuring is a sad but unavoidable part of the normal course of business. It’s one of the many clauses in our social contract in a (still, probably late-stage) capitalist world.
Sometimes these things are out of our control. We can’t win them all and sometimes we can’t get to everyone.
But as professionals we have an obligation (even if it’s out of pure self-interest) to control and influence where we can:
Clearly articulating to anyone and everyone who would listen, but definitely the people who matter, why intelligence capabilities need to exist within an organisation and how it is a new but essential part of the steering wheel to navigate the organisation.
Clearly and consistently deliver results at or exceeding the quality expected.
Demonstrate and report those results and how they tie back into bullet 1
Collaborate, partner, support, build allies with the teams and people you need e.g. government relations, sanctions, credit, strategy, supply chain. All of them have touchpoints with geopolitical or climate risk, but show why they need to have an intelligence team around and how it is different.
As ever, we should be at ease in knowing that regularly, if not every day, that:
What caught my eye this month
🇬🇧 🪭 If you live in London, did you know the city has official heat map and a cool spaces maps? They’re quite informative but they are far from complete, with the latter missing privately-owned cool spaces. Realistically, unless you a) have your own AC, b) are working in a modern office building / shopping centre, c) live under a lot of trees, or d) can ride the Overground, Elizabeth or Circle Lines all day, chances are you’re sweltering.
🌊 The Texas floods’ fallout has been well reported, with choices made + actions around local early warning systems (Ilan Kelman at University College London reminds us that all disasters involve choices made or not made), and the disinformation in the aftermath, showcase just how corrosive the polarisation of truth and belief has become, with some disastrous effects. It made my blood boil to read what happened to those campers, as well as the fiscal choices that were made in years past around investing in early warning systems. What we do with actionable intelligence is up to us or the people we support, but we should never deny ourselves and others the access to life-saving data. This should also be a big wake up call on why continuous funding for best-in-class tools for meteorological agencies like NOAA, Met Office and Meteo France are absolutely essential: put the ideological aspects aside and I think there should be broad consensus about life safety, protecting property and “an ounce of prevention is worth a pound of cure.” Sadly, I fear that events like this are going to continue the world over.
🤖 I’ve written a lot about why water is one of the greatest sources of future resource competition and conflict. And they don’t need to be in an already conflict-vulnerable region; local concerns in Alabama over plans for a hyperscale data centre revolve around water usage and waste, and the impacts it may have on water quality and accessibility for the local community. When that’s coupled with a lack of transparency over the whole development process, there are bound to be unhappy campers. AI demand is going to skyrocket, not least for national / economic security reasons, and the path to towards sovereign resilience in the digital space was never going to go smoothly. The Alabama situation is one of those which are likely emerge over and over in the coming years.
📊 Like any good analyst, the game starts with actionable data. Hannes Matt at KPMG shares a lengthy list of free, open source climate databases to highlight the need for more accurate, timely, accessible and relevant databases necessary to a) understand risk and vulnerability, and b) assess impact / loss and damage, both of which are crucial to structuring a wide range of financial products that can “future proof” investments and expenditures.
📈 But an even bigger deal is the rollout for the first time of short-term climate scenarios from NGFS (Network of Central Bank Supervisors for Greening of the Financial System) which also incorporates monetary policy, financial contagion risk factors, and sectoral and regional outcomes. To take a step back, NGFS is a core part of climate risk modelling used by scientists, policymakers, and in-house analysts; it underpins many, if not most, of today’s leading climate software products. NGFS scenarios bolt onto the physical impact models to showcase what happens in future worlds where the energy transition’s outcome ranges from smooth to disastrous. But these models were long-term and often did not have much to offer for short-term e.g. <10 years, and so their value have, up to know, been questioned by some investors and risk managers. But NOW the new models focus on the next five years, out to 2030. That makes them MUCH more relevant and useful for a whole host of end users - including risk professionals who want to, say, overlay a snapshot of the world politically or militarily in 2030 against the different climate scenarios offered by the new release. I personally think there are some very interesting potential insights to uncover there around:
future security hotspots which could cross tipping points into conflict
known security hotspots and what may drive new iterations of competition and conflict
regions x sectors with greatest need of immediate investment in future-proofing investment.
🇫🇯 Senior political and security leaders from the South Pacific met in Fiji last week to talk climate resilience investments, under the broader aegis of the Pacific Islands Forum, of which Australia and New Zealand are also members. The Pacific island nations are often forgotten in geopolitical circles until the US-China rivalry is raised. This is quite unfair on those island nations, but it should be noted in this era, who is listening more to them about their needs and providing the scaled investment needed to protect their survival from climate realities?
🏙️ Oldie but goodie topic: can cities find a second life as oases of resilience? In the US, could those be former rust belt cities in the interior like Buffalo, Cincinnati and Milwaukee? We know that most migration globally is internal - people tend to not want to move further than they need to, and ideally to places that both give them the best opportunities while maintaining some familiarity. Evidence is still scant that this is happening but as the physical risk impacts are almost certain for the rest of the century, shouldn’t we start investing in infrastructure in these cities ahead of mid-century?
Take care and see you next month.
Common sense in an uncommon degree is what the world calls wisdom.
- Samuel Taylor Coleridge