Welcome to the hudson institute. Ein senior fellow at the institute of we are here to talk with Christian Brose whose new book, the kill chain, is in the future of hightech warfare that Christian Brose just released. Chris is a former staff director for the Senate Armed Services committee an and prior to that e Senior Policy Adviser for senator john mccain and previously held other positions in the government. Right now he is the chief surgeon to build capabilities for the military as well as for the department of homeland security. We can talk about that as we go through the interview. But thank you for being with us today. So, just to start off, what led you to do this but i know youve been thinking about these issues for a while and obviously something that you have encountered during your time onn the surface kennedy and senator mccain is the policy adviser. But what was the genesis of sitting down and writing the entire book . Guest its a great question i ask myself constant const
I do believe the riskiest fossil fuels are easily identifiable youve gotten rid of some of them already. And there are others that can be done in a more immediate fashion. And in how many weve sold in the thermal area, what, Nine Companies . Right. Restricted. Okay. Thats what were looking to build on right now. How many people have come to you and said, weve divested and we made a mistake . Or we wanted to slow it down, if we had a chance to resell . Walk me through none of our signatories whatever divestment theyve done. Its important to differentiate. If you divest from all fossil fuels and you do that tomorrow, thats different than selling off two Coal Companies or whatever it is. So i think what ill say is that every signatory thats taken some kind of divestment action, has done it in a thought out, procedural way and not a reactive, getridofthistomorrow way. I can safely say that, right . Thank you. Thats helpful. Are we on time . Behind. Shall we go to alan or do you have more q
That we double up in this category then . You are a consultant. You are giving us advice for now and in the future. So if you believe its going to go up, why was that not in the recommendation that came before the board . Everybody in this room needs to understand that you hold securities in two places. You give them to managers and those managers make the decision on if the security is attractively valued or not. As a consultant, why dont you recommend us investing more money in the field if you think its going to go up . Were not recommending adding Additional Energy to the portfolio unless a manager hired to make that recommendation determines that thats what they should do. Were arguing that you dont take away that choice from them. The figures i quoted to you do not embed an expectation that Energy Prices will increase. What they do embed is taking energy away diversifies the portfolio. You made a statement that were making a political statement. Could you please back that up . My
John mentioned. That is to say, that the directionality is clear and transition to a lowcarbon economy is nuanced in the impact its going to have. John spoke really well to the nuances. It will create winners. It will create losers. The question is, how do you manage that Downside Risk and capitalize on the upsides of the transition . This response, how do you manage that and mitigates the solutions. Time check . I havent been timing you. Thats all right. Bill mckibbon called for a managed transition off fossil fuels. If were talking specifically about fossil fuel companies, which oil and Gas Companies are currently aligned with a two degree pathway and which are spending capital on projects that will be stranded down the line. To answer that question, there was a report that ranks the 69 largest oil and Gas Companies on the proportion of their capital expediture that falls either inside or outside of a two degree budget. What emerges is a picture of which companies are most exposed to
Thats all right. Bill mckibbon called for a managed transition off fossil fuels. If were talking specifically about fossil fuel companies, which oil and Gas Companies are currently aligned with a two degree pathway and which are spending capital on projects that will be stranded down the line. To answer that question, there was a report that ranks the 69 largest oil and Gas Companies on the proportion of their capital expediture that falls either inside or outside of a two degree budget. What emerges is a picture of which companies are most exposed to asset risk and least exposed. With that information, investors can choose a number of pathways. You can hedge that risk in a number of ways. John mentioned some of them. You can allocate to a lowcarbon index. It reweights towards better performers and underweights Carbon Emissions and momentum, transitioning to become more sustainable companies. And you can engage with the laggards and help them become more sustainable. And then you can,