The IPCC report has stated a 95% certainty that human activity is responsible for climate change and predicts that temperatures will continue to rise.
The publication of the Intergovernmental Panel on Climate Change’s report, a rigorous scientific assessment of the facts and figures onclimate change, is providing fuel to both climate change believers and sceptics.
The report, which is the first major assessment by the IPCC in six years, has serious credentials. Drawing on the papers of over 800 scientists, it was compiled over a period of six years through the IPCC, which itself has been convened by more than 190 governments.
The warnings are stark. The report’s conclusions include a 95% certainty that climate change is caused by human activity and an analysis that global warming is likely to skip past the two degrees rise beyond which lies dangerous damage to the environment. There are also predictions of sea level rises and statistics that show concentrations of greenhouse gases are the highest they’ve been in the last 800,000 years.
And while climate change sceptics have seized on the reference to a slowing down in the temperature rises over the past 15 years. IPCC scientists maintain that the longer term trends show successive warming.
Rajendra Pachauri, chair of the IPCC, has said it is time for the governments to take action now. But what about the private sector? What do the warnings mean for business and investors? And what can they do to tackle the risks posed by climate change?
We asked experts to give their views. We would love it if you can add your comments below to broaden to the debate.
Nick Robins – head of HSBC Climate Change Centre of Excellence
For governments, businesses and investors to take action to create a prosperous low carbon economy, they need the facts. And now we have them, in the form of the first volume of the IPCC report.
We now have greater levels of confidence that the global economy is responsible for the warming the world is experiencing – and we know that each decade’s average temperatures continue to rise. We also know, thanks to the new report, that the observed impacts of the limited warming we have experienced to date are faster and deeper than previously expected. These impacts are already being experienced by key economies, and HSBC’s latest research identifies India, China, Indonesia, South Africa and Brazil as the five G20 nations most vulnerable to the impacts of climate change. Together, they represent 31% of projected global GDP in 2050.
Over the following year, we believe that – from the next reports – the IPCC will provide stronger foundations for climate action by governments, businesses and investors, culminating in the deadline for negotiations in December 2015. Looking back, climate policies surged on the back of the 2006 Stern Report and the last IPCC review in 2007. But the rate of new policies then slowed significantly, in part due to a shift towards implementation and, in part, in response to the global financial crisis. But the economic outlook has improved since then, the costs of clean tech solutions have fallen and the multiple health, resource and innovation benefits of the low-carbon transition are becoming clearer, not least in China.
Many business and investor strategies to respond to climate change are based on the last generation of science. Now’s the chance to dust off the underlying assumptions and revitalise these commitments, so that long-term value is delivered through a clearheaded approach to the reality of climate risk.
Paul Simpson – CEO of CDP
The launch of the IPCC report continues the trend of strengthening climate change science that we have seen since the first assessment report in 1990. It ends the debate about whether climate change is real and caused by human activity.
The report will certainly not shock the market.Disclosures to CDP show that 84% of the world’s largest companies already see the risks that climate change regulation presents to their business, while 83% identify risks as a result of a changing climate. Such risks include regulation that may strand assets which become unprofitable due to carbon restrictions or business disruption as extreme weather becomes more frequent and severe.
The question is no longer whether these risks will be realised; it is when and at what scale. In this context, the report should bring a sharper perspective to businesses assessing their impacts on the environment.
If you were 95% sure your lifestyle was making you ill, you would change your way of life or buy the best available health insurance. Clearly all companies must now include climate change as part of their standard risk management.
Primarily the report reaffirms the need for action to reduce emissions and build resilience. CDP research demonstrates that the majority of the world’s largest corporations have started work in this regard but that progress is too slow. The challenge now is for investors, companies and governments to rapidly increase the pace and scale of this change.
Anthony Hobley – global head of sustainability & climate change and partner at Norton Rose Fulbright
As a business lawyer, I am trained to weigh up facts and evidence given by accredited experts from the subject under examination. This is how I look at the IPCC report.
The final report is a comprehensive summary of the huge body of work. It is in many respects the most thorough, comprehensive and rigorous assessment of a scientific issue in history.
Businesses know this. They are used to assessing complex scientific and legal issues. They know their business models are closely aligned with the current climate system and a changing climate means business risk and ultimately systemic risk to their business models. But the current regulatory and legal frameworks significantly handicap their abilities to respond.
Business is worried that governments will fail to respond by providing the policy signals business needs to do what it does best – adapt and innovate, which would create massive economic benefits.
The biggest danger is that governments put off action, then panic later and introduce stringent last-minute measures giving business little or no time to adapt.
Mindy Lubber – president of Ceres and director of the Investor Network on Climate Risk
Today’s IPCC report tells us that we’ve already exceeded half of the carbon budget available before we reach the point of emergency. This means that we must address climate change now, and that we need to stop burning fossil fuels.
The report matters across industries. It matters to reinsurance companies like Guy Carpenter & Company, which insures properties in coastal areas vulnerable to rising sea levels. The report validates why large-scale innovation in low-carbon insurance products and technologies that mitigate pollution is a must.
No industry is immune to the effects of climate change. That is why today, companies from all sectors are paying attention – and so are their stockholders. Companies and investors have no choice but to care about climate change because it impacts supply chains, disrupts commodity markets and exposes companies to political risk, costly regulatory changes and financial risks.
At the same time, climate change presents tremendous opportunity to invest in innovative products that will reduce reliance on fossil fuels while creating new markets and growth potential. This potential is hampered, however, because companies can only be successful in addressing climate change if they are supported by their investors and by strong government policies. This last area is where we’re falling short.
After two decades worth of assessment and reporting by the IPCC, companies and investors already understand the importance of reducing the impact of climate change. It is clear, however, as governments struggle around the world to implement effective policies, that we need the IPCC now more than ever.
Jeremy Leggett – chairman and founder of Solarcentury
If we do nothing in the face of these kinds of warnings about climate change, at some point, not far off in this century, nobody much is going to be doing any worthwhile business at all. Fossil-fuel energy companies are essentially on collective course to kill much of their ultimate customer base, and we cannot allow them to do it.
One strategy to stop the madness is to slow and eventually turn off the capital taps on carbon-fuel capex, tuning that with an acceleration of low-carbon industries at a pace akin to mobilisation for war. In this respect, it in notable that the IPCC presents clear evidence for a carbon budget approach. The IPCC findings are consistent with the research of the financial think tank I chair, Carbon Tracker, and reinforce the need to identify unburnable carbon, wasted capital and stranded assets in the capital markets. We can now expect stranded carbon-asset risk to become a standard agenda item in boardrooms of companies and regulators alike.
This is not a good time to work for much of Big Energy. Some companies have declared themselves, openly, essentially to be enemies of civilisation. Big utilities across Europe are telling policymakers to put the lid on renewables or else. They want to throw gasoline on a fire that’s in the first stages of burning our collective house down, and we must stop them.
Letitia Webster – director of global corporate sustainability at VF Corporation
The IPCC report affirms what we already know: challenges from climate change are becoming ever more clear.
We are one of the world’s largest purchasers of cotton. We need a land area roughly the size of Rhode Island to grow enough cotton to meet our production demands. Much of this cotton comes from regions that are expected to be impacted most by water scarcity and extreme weather – specifically, the western US, China, Pakistan and India. We’ve already seen raw material disruptions caused by the prolonged droughts in the western US and the more recent flooding in Asia.
What are we doing about it? We’re working with the Better Cotton Initiative to introduce more sustainable farming practices to cotton farmers. This programme systematically reduces the use of pesticides and fertilizers and helps farmers implement better irrigations methods – drip irrigation, in particular.
Second, some of our largest brands such as The North Face, Reef and Nautica, are dedicated to the outdoor lifestyle. Whether in mountains or the ocean, our brands and our consumers are feeling the impacts of climate change.
The ski industry is one example: The industry is seeing winters that are two weeks shorter, with an average of two feet less snowfall annually. This means resorts are opening later, which translates into fewer ski days, which could mean less ski-related business for our brands. Our oceans are also being hit hard by acidification and loss of marine life.
These impacts are real, and our brands and consumers feel it firsthand. They expect us to act in a responsible way and reduce our carbon footprint – helping the environment and the outdoor activities they love and that we outfit them for.
Source: The Guardian.com