The threat that climate change poses to human well-being and the health of the planet is “unequivocal”, says the latest report from the United Nations’ Intergovernmental Panel on Climate Change (IPCC).
“It is a wake-up call to businesses to put climate change risk at the front and centre of strategy planning. Any company that thinks it is insulated from the risks outlined in the IPCC’s report, or that these are distant issues for the developing world, is mistaken. The interconnectedness of global supply chains and commodity markets, highlighted by both Covid and recent energy price shocks, means these impacts will reach every geography, and every type of business. We simply cannot afford the environmental and economic cost of inaction against the climate crisis.”
Will Jenkins, Director of Strategic Services, Carbon Intelligence
First things first – what is the IPCC?
The IPCC was created to provide policymakers with regular scientific assessments on climate change, its implications and potential future risks, as well as to put forward adaptation and mitigation options. The IPCC is made up of the world’s leading experts who volunteer their expertise and time to provide all levels of governments with scientific information that inform the development of climate policies.
IPCC Report – AR6 Climate Change 2022: Impacts, Adaptation and Vulnerability
This latest report is the second part of the IPCC’s 6th Assessment report (AR6 WGII) and the most comprehensive review of climate impacts and how much we can adapt to them.
It outlines in stark terms the challenges climate change poses globally to every aspect of our society and economy. It compiles the latest knowledge on climate change, the threats we’re already facing today, and what we can do to limit further temperature rises. Watch the full report press conference here.
Carbon Intelligence’s response to the report
As the physical impacts of climate change accelerate- risk modelling and understanding the impact on business becomes essential. While many businesses are focused on shorter term climate change mitigation actions, which are clearly the priority, there is a need to evaluate longer term horizons, particularly for significant investment decisions like where to locate a new facility or which market to serve.
Traditional risk modelling tends to be based on what we have experienced in the past, and the data records are typically quite short. The future will be more volatile than we have previously experienced, with climate change causing increasing and more extreme fluctuations in raw material and commodity pricing due to higher temperatures, water stress and extreme weather. Updating risk models to reflect this needs to be a priority for businesses everywhere, especially as more companies globally face incoming TCFD regulation that will mandate this level of risk analysis and reporting.
There is also a growing reputational and financial risk for businesses to manage as improving attribution science makes ever stronger links between the actions of businesses and climate change. Under double materiality, investors and customers will increasingly scrutinise the impact of businesses on communities and ecosystems, and those businesses seen to be falling short risk their reputations, and losing revenue and investment.
The businesses that will thrive in an uncertain future are those with a robust net zero transition plan with near-term and long-term science based targets, and those that are working with a sustainable and resilient business model that considers planet, people and profit.
The IPCC’s report makes clear that transformative rather than incremental change is needed. If your business is only taking small steps, it is at best maintaining the status quo. To have a positive impact in these unprecedented times, radical thinking is required.
5 ways for businesses to take climate action
There is no doubt that businesses will be affected by known and unknown climate risks in the near future. Pressure to manage those risks and commit to drastic emissions reductions will magnify as we edge closer to the next climate ‘tipping point’.
- Climate adaptation and resilience:
- Align to TCFD recommendations, and assess your ability to respond to climate-related risks and opportunities in different climate scenarios
- Join the Race to Zero
- Commit to Net Zero and set a Near-term and Long-term Science-Based Target
- Commit to the Business Ambition for 1.5°C campaign, an urgent call-to-action for companies to set emissions reduction targets in line with a 1.5°C future
- Clean energy:
- Commit to 100% renewable, join the RE100 initiative
- Clean transport:
- Electrify your fleet, join the EV100 initiative
- Nature based solutions
- Develop a carbon removals/neutralisation strategy that involves nature-based solutions
- Engage with the Science Based Targets Network to develop science-based targets for nature
- Engage with the Natural Climate Solutions Alliance https://www.weforum.org/natural-climate-solutions-alliance
- Climate finance
- Implement carbon pricing
- Incorporate net zero aligned investment strategies
How Carbon Intelligence can help
The planet is heating up – but by how much will be up to us.
We are committed to supporting organisations to understand and reduce their emissions in line with climate science, engage their people and create long lasting system change that will turn climate ambition into action. The countdown is on, don’t wait to act. Contact Us today to see how we can support you.