8 minute read

ESG objectives in defense

The energy crisis brought on by the ongoing situation in Ukraine has invited many conversations around the sustainability implications of geopolitical events and defense entities, even inviting conversations about defense ESG (ethics, sustainability, and governance). Cvete Koneska, Head of Advisory at security intelligence firm Dragonfly has been fascinated by the evolving debates and was keen to discuss the future sustainable and ethical landscape of the defense industry.

Laurence Russell, Associate Editor, Global Military Communications

Question: The war between a NATO-inclined country and a fossil fuel giant has exposed some stark realities between modern defense and global sustainability goals. Could you recap how these themes have intersected over the course of the Ukraine conflict?

Cvete Koneska: The immediate layer to address is that geopolitical tensions have shown us that political will is not compatible with sustainability aims in wartime and there’s no escaping that.

That’s the headline that’s been impossible to ignore, but the conversation is more nuanced than that under the surface. It’s not to say that all sustainability goals have been abandoned wholesale in the interest of satisfying geopolitical objectives. The campaign in Ukraine and its ramifications for the world can be seen as an opportunity to disrupt the complacency of our fossil fuel status quo, galvanizing the transition away from our reliance on them.

Of course, these transitions were always going to be painful, and the shock of war doesn’t make the culture change go down any easier. In the stressed economic situation, the global economy finds itself in, governments are cautious and slow in introducing potentially painful policy changes, but of course, as so many scientists have explained, the more deliberation and delay we insist upon today will only hurt us worse tomorrow.

Question: Europe has long stated enthusiasm for climate action, but its states have found a consensus challenging to reach. Has the situation in Ukraine bolstered the will to follow solutions, or simply reiterated the need for larger-scale national fossil fuel production?

Cvete Koneska: There’s really no binary answer to something like that. We’re talking about very different economies and cultures among the EU members. Of course, the European Union as a whole has stated its deliberate aims, and academia worldwide is in unanimous agreement, but there remains some convincing to do.

Cvete Koneska, Head of Advisory, Dragonfly

Cvete Koneska, Head of Advisory, Dragonfly

There is a lot of unity among European leaders. We’ve seen a very strong will regarding Russia’s punitive sanctions and the efforts to untangle supply chains from Russian oil. There have been suggestions that some EU members may have been interested in watering these commitments down or even opposing them, but beyond rumor, this simply hasn’t been the case.

This kind of agreement among European states is quite rare indeed, and so a very precious thing. Whether that will translate into broader policy and joint energy strategy is yet to be seen. Some EU members have thought to act now rather than wait to see what the European Commission might come up with. For instance, Germany came up with their own package of policies which made quite a splash.

Of course, that isn’t to say that the EU won’t come up with effective support, especially for its more vulnerable countries and economies.

Question: In the current climate, what are the quick and sensible solutions to remedy global energy needs?

Cvete Koneska: I don’t think there are any options that are both quick and sensible at the moment. Rather, there are quick solutions that do the most to stabilize the existing economic situation, that aren’t at all future-minded, like re-opening coal mines. Then, there are sensible, unpopular decisions that will let the existing economic difficulties deteriorate as we work towards a state of stability some time down the line, like green transition or building more liquified natural gas (LNG) terminals to restructure fuel lines independent of Russia.

Generally, we’ve seen a trend toward a set of quick options, but there are simply very few tools to soften the blow of such a sudden and comprehensive crisis as the one northern Europe will be contending with this winter.

On the bright side, all this furor provides precedent to reinforce European defenses for dealing with the energy crisis that comes after this one, because it will by no means be our first, nor worst, of the 21st century. Just as with the COVID-19 pandemic, the lessons we learn through this crisis will make us all the more capable against similar challenges in the future.

Question: How would radical solutions play out if they went ahead? If we saw a complete Russian oil & gas embargo tomorrow combined with emergency renewable and nuclear solutions, how would Russia’s former customers fare?

Cvete Koneska: They wouldn’t fare very well at all. Even in the best-case scenarios for the European Winter fuel crisis, we’re going to see some uncomfortable circumstances indeed. Of course, in a vacuum, a radical solution like the one proposed would be excellent for the long-term outlook, but it’d likely be politically very costly for whoever delivered such a policy, because of massive requirements of political and economic capital. Worse still, in the short term it would likely increase poverty, reduce equality, and leave a historic black spot-on whatever party delivered the policy.

Photo courtesy Pixabay/Pexels

Photo courtesy Pixabay/Pexels

Question: Modern military forces have been accused of significant emissions abuses for decades. Are existing green initiatives enough to change that reputation?

Cvete Koneska: They could always do more of course –particularly in the realm of early adoption. As you can imagine, the military has heavy research and development departments, which puts them far and away at the cutting edge of technology. They’re positioned perfectly to be the pioneers of green technology, and there really is no good reason at all why they should be behind the sustainable capacity of the average leading tech corporation.

To their credit, militaries are huge ecosystems that do not change quickly, and transitioning their energy and fuel infrastructure would be far from cheap, which means they don’t have the same agility as smaller businesses, but that doesn’t change the fact that they have all the right tools at their disposal to be role models in this field.

Question: Some commentators might imagine that defense and ESG priorities are a disingenuous combination, particularly ripe for accusations of greenwashing. What exactly does authentic ESG in military institutions look like?

Cvete Koneska: Militaries do not make commitments to sustainability the way businesses do, so they’re far less focused on the topic. T+ypically, defense institutions aren’t held to the same ESG standard in this regard, despite militaries being responsible for a wide swathe of emissions. They don’t tend to greenwash because by and large, there isn’t much pressure for more environmental militaries.

This doesn’t mean we can’t talk about authentic ESG in defense. To that end, the prominent starting point in that arena probably isn’t environmental but rather in governance and social risk issues. There have already been a number of high-profile issues around the topic of gender and LGBT issues in militaries as well as poor data protection points. Of course, these cultural issues can be smoothed out in concert with strong environmental goals, but in terms of what we’ve seen the public value, social conversations have taken precedence.

Question: How can enhanced defense spending on ethical investments bring about defense industries and militaries that experts could conclude were definably more moral?

Cvete Koneska: This question alone could easily be the subject of several years of research in a top academic center. To that end, I’ll have to engage at a more surface level than the concept may require.

For years financial providers have been screening out defense developers from their portfolios on principle, especially in terms of ethical funds to the point where you wonder where ethical change could come from in this industry. However, this subject will likely be forced in some degree by the onset of how artificial intelligence technologies relate to defense development

We are on the cusp of seeing AI-driven weaponry in our world, a sea change, crucial to how militaries can operate in future. This change has real potential to empower a more comprehensive ethical movement in the space, hopefully driving a more responsible and ethical era of peacekeeping and the resolution of hostilities.

A wave of unregulated AI-enabled military technologies would be disastrous for mankind no matter whether your goals are moral or economic. The engendering of these AI-enabled tools to international codified conventions of engagement would be imperative if we are to avoid unintended consequences.

I cannot say how such conversations and others like it will develop through academic, mass media, and public mainstream channels, but I can be certain that it’ll be critical to the world to come, and certainly bears watching. GMC