Opinion: Businesses Face ‘Inevitable’ Climate Change Disruption

Businesses must prepare for inevitable climate change, writes Forum For The Future’s Iain Watt

The release of the IPCC’s Special Report on 1.5°C has, quite rightly, caused much reflection (although insufficient furore) amongst the corporate sustainability community.

Here are four insights we took from reading the report, along with our thoughts on the implications for our corporate partners (or, indeed, any company aspiring to be a climate leader).

1) There’s still a chance of staying under 1.5°C, and we have to grab it!

The 2015 Paris Agreement saw the nations of the world agree to keep “the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels, recognising that this would significantly reduce the risks and impacts of climate change”.

Despite the clear implication in this text that 2°C should very much be seen as an upper threshold, most of the discussion around governmental and corporate activity since then has remained focused on 2°C, and is concerned with targets and budgets that only give a 66 per cent chance of staying under that limit.

The IPCC’s Special Report was therefore a welcome and timely reminder that the aim should be to keep warming to well below 2°C – even if doing so requires radical action on extremely tight timeframes.

The IPCC’s Special Report was therefore a welcome and timely reminder that the aim should be to keep warming to well below 2°C – even if doing so requires radical action on extremely tight timeframes.

And avoiding 1.5°C does indeedrequire radical, immediate and all-encompassing action.

2) 1.5°C still poses considerable risk

The Special Report updates the risks facing the following ‘natural, managed and human systems’ as follows:

Put simply, it doesn’t look good for corals (and that, presumably, means coral-based fisheries/tourism too) even at 1.5°C. And the Arctic, unsurprisingly, is on the front line of disruption too.

More worrying, this categorisation of impact/risk does not incorporate the possibility that a climatic ‘tipping point’ might be crossed – or, indeed, that the risks outlined here might themselves trigger further disruption.

Sticking with the Arctic, if the loss of summer sea-ice accelerates – or if currently-trapped methane (whether in permafrost or seabed clathrates) starts to be released in significant quantities – then the wider implications will be profound.

We are already seeing links being made between current changes in the Arctic and northern hemispheric weather; most notably a wobblier and slower jet stream and an increase in associated ‘blocking patterns’ that can bring both drought and deluge.

But, given the uncertainties involved, such possibilities are not captured in the IPCC’s projections of future climate, alarming as they are.

So while the IPCC’s analysis, and related resources such as this excellent primer put together by CarbonBrief, should be the starting point for any company’s consideration of physical climate risk, it’s also critical to consider low-probability but high-impact possibilities.

3) The carbon budget has actually increased

Despite the ominous prognosis, the IPCC has actually increased the carbon budget for 1.5°C from 120 to 570 Gigatons of CO2 (for a 66 per cent chance of ending up below this threshold).

Anything that buys us even a little more time is to be welcomed. Carbon budgets, however, are notoriously uncertain things– and the uncertainties around this budget are almost as large as the budget itself.

The revised budget does mean there is now a bit more confusion about ‘how long we have left’ – at least in terms of media headlines. We’ve gone from “three years left at current emissions” to a variety of headlines such as “10 years to turn things around” or “12 years before we experience irreversible damage.”

None of these should distract from the reality that we need to decarbonise the entire economy, and recarbonise our soils and ecosystems as soon as humanly possible.

None of these should distract from the reality that we need to decarbonise the entire economy, and recarbonise our soils and ecosystems as soon as humanly possible.

4) The future is now inevitably disruptive

Global emissions continue to increase. The report emphasises something that Forum has been saying for some time: that your company, and society, now faces an inevitably disruptive  future.

If we go above 1.5°C (never mind 2°C), the resulting geophysical change will put huge stress on the global economy, threatening agricultural production and the viability of global supply chains.

Alternatively, if we manage to stay under 2°C (never mind 1.5°C), your company will have to navigate the rapid and complete transformation of the global energy, food, land-use and transportation systems.

Either way, climate change, and/or the societal response to climate change, is going to fundamentally transform the competitive context within which your company operates. Your company cannot escape this reality, and it has to be preparing accordingly.

Either way, climate change, and/or the societal response to climate change, is going to fundamentally transform the competitive context within which your company operates. Your company cannot escape this reality, and it has to be preparing accordingly.

To sum up:

  • The world must fully decarbonise (and recarbonise) as soon as possible. Indeed, total system change is required…
  • Corporate targets regarding carbon/climate must now be zero+ (i.e., at least, carbon neutral/zero carbon, and preferably carbon positive/regenerative). Simply being less bad no longer counts as leadership.
  • Companies also need to become effective advocates for, and agents of, rapid societal decarbonisation. All the dark arts of lobbying, marketing and persuasion should be adopted to convince governments in particular that inaction will be terrible for business (and/or the economy).
  • Your company and society now faces an inevitably disruptive future. Either we face the impact of a beyond 2°C world, or we utterly transform the global economy in the next couple of decades. Both options pose unsurmountable challenges for business-as-usual.
  • Complacency regarding both of these remains the biggest barrier to action

Iain Watt is chief climate expert at Forum for the Future, a London-based charity that promotes sustainable practices in businesses and government.

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