The new Intergovernmental Panel on Climate Change’s (IPCC) Synthesis Report states there are “multiple, feasible and effective options” to reduce emissions in line with the Paris Agreement, but that the world is currently not on track to achieve them.
The IPCC’s report today reiterates that the world will fail to meet either of the Paris Agreement’s temperature pathways – 1.5C and 2C – with stated policies likely to result in a 2.8C trajectory even if delivered in full. At this level of warming, they claim, many places will not be “liveable”, with increased risks such as coastal flooding and food and water insecurity that would put up to 3.3 billion livelihoods at risk.
However, the report claims the methods and measures to reduce greenhouse gas emissions to deliver the 1.5C target “are available now”, but that the pace and scale of what has been delivered so far are “insufficient”.
With “every increment of warming” causing “rapidly escalating hazards”, including wildfires, flooding and severe drought, the report warns that the climate crisis will continue to cause food and water insecurity and conflicts.
The report also notes that businesses proved during the pandemic that they can pivot at speed so should not hide behind the excuse that policies can take months or years to implement.
The report has been labeled as a “final warning” on the climate crisis but green groups have stated that it can also act as a “how-to guide to defuse the climate time bomb”.
Businesses should revisit decarbonisation targets
Responding to the IPCC report, UN secretary-general Antonio Guterres said a “quantum leap” in climate action was needed and that countries, particularly wealthier ones, should seriously look at pushing net-zero targets forward to 2040.
Businesses could start to look at their own decarbonisation strategies and any with climate targets should revisit and, indeed, raise them.
Those companies that have set net-zero commitments, but are yet to flesh out the steps to meet short and medium-term science-based targets, could take this as a nudge and opportunity to address those measures.
The United Nation’s Race to Zero initiative, for example, commits non-state actors including corporates to commit to achieving net zero carbon emissions. As of September 2022, 11,309 non-State actors including 8,307 companies, 595 financial institutions, 1,136 cities, 52 states and regions, 1,125 educational institutions and 65 healthcare institutions have signed up to the Race to Zero.
However, not all corporates have set net-zero targets that account for their whole supply chain.
Indeed, research published by South Pole last year revealed a trend towards ‘greenhushing’ around business climate targets. Covering 1,200 large businesses with net-zero targets, that research found that one in four (26%) of the companies who had applied to the Science Based Targets Initiative had not published information about the new targets on their own websites or reports.
The new IPCC report warns that action is required to “close the gap” on what little has been delivered on adaptation and what is required to adapt to the climate crisis.
Integrating measures to adapt to climate change should happen in tandem with the focus on sustainable development.
The report places significance on solutions that can draw down carbon, including nature-based solutions like soil restoration and tree planting, and man-made solutions including direct air capture (DAC). It recommends that, in the long-term, the world should strive to go beyond net-zero and looking to net-negative emissions.
The IPCC is calling for at least a six-fold increase in finance provided to emissions reduction projects by 2030, coming from a combination of public and private finance.
There will need to be a particular focus on directing finance to the global south, the IPCC states, and finance will need to be spent in line with scientific, local and indigenous knowledge rather than in line with the solutions that are most politically popular.
The private sector will argue that it needs political clarity as to what areas can and should be prioritised and the UK’s own government watchdog recently criticised policymakers for failing to create stable market certainty for investment in climate adaptation.
The UK is working to develop a green finance taxonomy. Such a tool can be used by investors, corporates and others to define which activities are ‘green’ and can be supported and reported as such. Nuclear was most recently listed as environmentally sustainable under this taxonomy, but private sector investment still remains short of what is required.
The UN Environment Programme notes that the “public sector alone cannot finance transformation” and that mobilising the required $3-6trn each year to transition to net-zero-emissions and climate-resilient economies by 2050 will need “private finance to align with these efforts”.
As well as stepping up efforts to funnel investments into green solutions, businesses will need to improve climate-related disclosures to help investors decide what companies should be supported and invested in.
One of the primary recommendations from the IPCC report is for governments to step up, whether that be through mobilising more climate finance and innovation or setting stronger, more ambitious net-zero targets.
It will be important that the business community collectively uses the findings from the IPCC to influence policy decisions for the better.
The next major research report from the IPCC isn’t expected until around 2030 so what is detailed in this report is essentially the final warning on how to stay within the 1.5C limit of the Paris Agreement.
The key warnings and findings of this latest report will shape climate policies and discussions over the coming years. Guterres likened it to a “how-to guide” to respond to the climate crisis and it would serve businesses well to save a copy of the report and digest the research.