The science is clear: Both climate adaptation and mitigation are needed now
For edie's COP26 Primer on Climate Adaptation & Resilience, CDP's global head of value chains and regional director corporations Sonya Bhonsle outlines why businesses need to start focusing on climate adaptation now.
It is clear we have reached a critical point for climate action. The latest IPCC report issued a ‘code red’: system-wide action must be taken now if we are to avoid disastrous and potentially irreversible climate tipping points.
For years, climate adaptation and mitigation have been falsely considered at odds with each other. The IPCC’s latest findings show that, no matter how rigorous climate mitigation strategies are, many impacts of climate change (such as rising sea levels and increased extreme weather) are now so baked into our environment that adapting to these is also essential. Only with a combination of climate adaptation and mitigation can we truly achieve climate resilience, and businesses have an integral role to play.
It’s important to recognise that the economy has a vital role in implementing climate adaptation at scale. We need to see companies around the world climate-proofing their value chains and adapting to the reality of a climate that is already changing.
CDP data shows that 68% of companies globally are publicly reporting climate-related risks with potential substantive financial or strategic impact. Crucially, however, this has not yet translated into widespread consideration of climate risks when planning for the future – with less than 38% of companies using climate-related scenario analysis in business planning.
In order to achieve the Paris Agreement’s goal of limiting global temperatures to 1.5C, businesses must act now to ensure that climate risks and impacts are taken into consideration not only for their operations but also for their supply chains. CDP’s latest supply chain report found that companies are facing up to $120bn in environmental risks from their supply chain by 2026. The report also highlighted that, on average, supply chain greenhouse gas emissions are 11.4 times as high as operational emissions – demonstrating the urgent need for impactful action in this area.
However, only 37% are actively engaging with their suppliers on this topic. Quite simply, if a company’s supply chain is not climate resilient, the company remains vulnerable to climate risks.
There are tangible business benefits to be gained from climate adaptation: from building long-term climate resilience to brand reputation and getting ahead of new environmental regulations. Corporate action also helps to drive more ambitious government legislation as companies show their appetite for bold action, creating a positive ‘Ambition Loop’ that inspires further action.
In 2018, the IPCC warned that ‘limiting global warming to 1.5C will require rapid, far-reaching and unprecedented changes in all aspects of society’. The IPCC’s latest report echoes this and acts as a rallying call for both governmental and non-governmental actors. The report also highlights that all environmental challenges we face, including deforestation, biodiversity, water security and climate change, are inseparably linked and must be addressed in a holistic way.
Since launching in 2019, more than 700 companies from diverse sectors worldwide, with a combined market capitalization of over $13trn, have joined the Business Ambition for 1.5C and committed to credible net-zero targets in line with a 1.5C future. By signing up to Business Ambition for 1.5C, companies will be joining a network of visionary corporate leaders taking robust climate action.
Alongside that, companies should be looking to build climate transition plans and ensure they are adapting for the 1.5 future. Companies with strong transition plans demonstrate specific, time-bound actions they will take in order to reach net-zero and thrive in the new green economy.
If businesses are to stride towards climate resilience and safeguard their operations and supply chains, the science is clear: both climate adaptation and mitigation are needed now.
COP26 Primer: Climate Adaptation & Resilience
edie’s COP26 Primer Reports are about seizing the green opportunity. Produced in the run-up to the official talks, this mini-series of reports are based on the five key themes of COP26: Clean Energy, Clean Transport, Climate Resilience, Nature-Based Solutions, and Climate Finance.
This report, sponsored by UL, examines how crucial green finance is in driving the net-zero transition and overcoming the climate crisis. It also explores the role that COP26 will have in creating new tipping points for nations to seize the economic, societal and planetary benefits of shifting finance streams towards a sustainable future.
From the enablers and accelerators to the global climate finance movement, to the political challenges and consequences of failing to pivot away from supporting carbon-intensive sectors, this report acts as a timely state-of-play for global efforts to deliver a green recovery and kickstart the net-zero trajectory.