IPCC climate mitigation report: Four key ways businesses can respond to the latest climate science
The Intergovernmental Panel on Climate Change (IPCC)'s latest report outlines how the coming years will be crucial if decarbonisation is to happen at the necessary rate to avoid the worst of the climate crisis. While the top-level calls to action are for nations, there are some key considerations for businesses wanting to lead on climate.
Published on Monday (4 April), the Sixth Assessment report from the IPCC’s Working Group 3 states that there is still time to limit the global temperature increase below 1.5C, in line with the Paris Agreement’s most ambitious trajectory. However, that window is rapidly closing.
A headline conclusion is that global emissions will need to peak by 2025 if either of the Paris Agreement’s temperature trajectories – 1.5C or “well below” 2C – are to be realised. Then, by 2030, global net emissions will need to be 48% lower against a 2019 baseline for a 1.5C scenario, or 26% lower for a 1.5C scenario.
For those actors still doubting the economic benefits of “deep, rapid and wide-reaching” emissions cuts, the report outlines that, in all 2C and 1.5C scenarios assessed, the cost of mitigating emissions outweighs the costs of inaction. Moreover, the report concludes that sustained economic growth and sustained decarbonisation are compatible and already happening in several nations.
Delivering these deep and rapid emissions cuts will require transformational change in the near-term, and the private sector undeniably has a major role to play. For sustainability professionals wondering what this latest report means for them and their organisations, edie has summarised five key messages from this latest IPCC report.
Look at your lobbying networks
Many prominent climate scientists and campaigners have spoken on Twitter about the numerous mentions in the report of how, historically, engagement between policymakers and the private sector has served to weaken climate action – and how this cannot continue.
The report states: “The pact of a transition can be impeded by ‘lock-in’ generated by existing physical capital, institutions and social norms. The interaction between politics, economics and power relationships is central to explaining why broad commitments do not always translate to urgent action.
“Accelerating climate mitigation includes… overcoming resistance to policies (e.g. from incumbents in high carbon emitting industries), including by providing transitional support to the vulnerable and negatively affected by distributional impacts.”
This latter point implies that high-carbon industries may once have relied on arguments relating to shareholder value and stakeholder profit to lobby, but may now be discussing the risks of a non-just low-carbon transition in order to promote a slower transition altogether.
Now is clearly a good time for businesses to look beyond the climate impacts of their own operations and even their own value chain, and to assess how the trade bodies they are part of are engaging with policymakers on climate. A few weeks prior to the IPCC report release, investors collectively managing more than $130trn of assets committed to end support for corporates that lobby to delay, dilute or block climate action.
Prove how your climate targets link to future funding plans
As noted above, broad, long-term commitments on climate have typically failed, so far, to deliver the necessary short-term actions on the ground. While commending nations and businesses for increasingly pledging to net-zero by 2050, the report argues that such commitments need to be properly backed in up the near-term. Indeed, current ‘business-as-usual’ trajectories and commitments will likely result in at least 2.8C to 3.2C of temperature increase, by the IPCC’s calculations.
A key facet of the report is its recommendations for moving finance in the coming years. The 2C and 1.5C scenarios assessed all entail at least a tripling, and at most a sixfold increase, in climate finance this decade. Finance will need to be transitioned out of fossil fuels and into clean energy, low-carbon agriculture and related solutions at a more rapid pace than previously expected.
It is clear that the private sector will have a major role to play in “simultaneously weakening high-carbon systems and encouraging low-carbon systems” in the infrastructure, processes and partnerships they choose to finance. If your organisation states that it has a net-zero goal or 1.5C-aligned targets, financial plans may need to change to meet them, and this may result in a changed business model.
As IEMA’s chief executive Sarah Mukherjee puts it: “It’s imperative that there is an immediate increase in investment in the green jobs and skills required for a successful transition to a sustainable global society…. There can be no more hiding the truth behind empty pledges.”
CISL’s director of policy Eliot Whittington added: “A growing number of businesses have set net-zero goals and started to deliver the innovation and transformation required by this – but a much larger set of businesses need to take action and embark on this journey – delivering not empty promises but real commitments of action.”
Explore a mixture of carbon sequestering solutions (with caution)
As expected, the report states that reaching net-zero by 2050 does not guarantee that the global temperature increase will be held at 1.5C. It is likely that this threshold will be breached, but with the right levels of decarbonisation and carbon removal, the breach will be temporary. Going beyond net-zero to net-negative emissions increases the chance of keeping to 1.5C.
Also as expected, the report states that carbon removal solutions will need to be rapidly scaled in the coming years and decades, in tandem with deep cuts to emissions. The conclusion is that no one nature-based solution or man-made technology will be able to deliver the emissions sequestration needed even with deep decarbonisation.
There is a clear warning that carbon removals cannot be a substitute for deep decarbonisation. Even if a mixture of man-made and nature-based solutions are rapidly scaled, the report concluded, this will not be enough to address emissions on a business-as-usual trajectory.
For businesses, this means that credibility around carbon offsetting and insetting targets will rely on them being coupled with science-based ambitions to reduce emissions across the value chain, including Scope 3 (indirect) emissions. Moreover, businesses looking to lead in this field will need to look at a mixture of solutions over a range of timescales.
Don’t underestimate the power of engagement
It has been remarked that this report places a far greater emphasis on demand-side levers to reduce emissions than any others from the IPCC to date. “Substantially reducing overall fossil fuel use” to the extent needed will require changes to businesses and systems in ways that mean individual lifestyles will be altered.
In the 2C and 1.5C scenarios assessed in the report, demand-side mitigation results in net global emissions reductions of at least 40% by 2050. In the most optimistic case, the reduction potential is 70%. This is clearly significant. Changes advocated for in the report include shifts to more local and seasonal diets with more plant-based foods and less food waste; reusing products for as long as possible; saving energy in buildings and a modal shift to electrified, public and active transport.
These changes in behaviours are likely to not only decrease emissions, but to improve public health and wellbeing.
Businesses in some of the sectors mentioned in the demand-side chapter, such as food and transport, clearly have a responsibility to shift their business models to help facilitate this shift in behaviour change at scale. This shift will provide new opportunities for innovation and could help minimize risk in the future, building resilience to future policy and cultural changes.
But most businesses have some capacity to empower their customers, clients or staff to make changes to their own routine. In this way, the report indirectly emphasises the importance of good engagement and behaviour change in the delivery of sustainability strategies.
edie will notably be hosting a week of engagement-focused content and events on the week beginning 25 April. More information will be published shortly. Already confirmed is a free-to-attend series of online events on the afternoon of Thursday 28 April – click here for full details and to register.
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