What the latest IPCC climate report means for business
Posted on 11 May 2023
The most recent climate science from the IPCC shows that emissions are still rising - but also that we have the solutions to limit warming to 1.5°C. What are the implications for business?
The latest climate report from the UN’s Intergovernmental Panel on Climate Change (IPCC) offers a message of hope, a warning and a challenge - and businesses have a crucial role to play in changing the course of our planet’s future.
The IPCC’s reports are written and reviewed by thousands of scientists and experts from around the world, providing an authoritative assessment of the scientific evidence on climate change. They are important indicators for businesses as they influence the UN climate talks and the policies, plans and climate targets of many countries, and generally shape the global trajectory of action on the climate crisis. These reports gather considerable media attention, which helps raise awareness and shape public opinion, and they have informed many of the standards businesses rely on today, including the Science Based Targets initiative’s guidance.
The latest report shows that greenhouse gas emissions have climbed to their highest levels in human history. We are not doing enough to respond to this crisis and limit warming to 1.5°C (the threshold to avoid the most catastrophic impacts for people and nature). However, it also shows that we already have solutions, in every sector, to halve emissions by 2030, in line with a 1.5°C pathway. The following are just a few of the key takeaways for businesses:
Climate risks are increasing
Climate impacts and extreme weather events like floods, storms, droughts are a growing threat to supply chains and business continuity. If businesses do not see this risk now and change course, it will not only disrupt, but wipe out many of their operations.
The IPCC shows that limiting warming to 1.5°C will substantially reduce the risks of climate change for people, nature and economy, as well as the scale of losses and damages. Further global warming will increase the frequency and severity of climate hazards, and warming beyond 1.5°C will cross the limits for many vulnerable communities and ecosystems to adapt.
Action this decade is crucial, and businesses can be a game changer
If we are to meet the emission reduction targets set out in this report - 43% by 2030, 60% by 2035 and 69% by 2040 (from 2019 levels) - we need all parts of society to act immediately.
Businesses can help ensure this change is delivered at the pace and scale necessary, as they operate in the sectors that desperately need transformation, including energy, industry, agriculture and land-use, buildings and transport. They can invest in the solutions and innovations that can cut emissions and unleash business ingenuity at every level with their customers, investors and employees.
Conditions for corporate climate action are the best they’ve ever been
The business case for climate action has never been so good. The costs of solutions such as solar and wind energy and batteries have decreased by up to 85% over the last decade, often making them a cleaner and cheaper alternative to fossil fuels. Energy efficiency and reducing demand can help reduce both costs and emissions.
There is also increasing proof that change is possible - around 20 countries have already shown that they can reduce emissions for longer than a decade. The economic cost from climate impacts outweighs the costs of climate action.
Nature is an important ally
We can’t hope to limit warming to 1.5°C, adapt to climate change and save lives and livelihoods, unless we also act urgently to safeguard and restore nature. The IPCC shows that the planet’s oceans, plants and animals have absorbed 54% of man-made carbon dioxide emissions in the past decade, saving us from even more severe levels of warming. But we’re losing this important ally.
Corporate action on climate and nature can and should be integrated - businesses don’t need to choose one or the other. Companies and financial institutions can assess impacts and dependencies on nature using tools like WWF’s Biodiversity Guide for Businesses, and then commit to action and join the Science Based Targets Network, which is helping companies develop and set targets for nature.