We’ve been warned about a “brief and rapidly closing window of opportunity,” as well as a “code red for humanity,” in reference to the climate crisis. On April 4th, United National Secretary General Antonio Guterres introduced the third report published by the Intergovernmental Panel on Climate Change (IPCC), this time casting blame on the wealthy economies that are “choking our planet, based on their vested interests and historic investments in fossil fuels, when cheaper, renewable solutions provide green jobs, energy, security and greater price stability.” We are at fault, and there is no excuse for inaction.
The IPCC’s report, the Mitigation of Climate Change, offers an updated global assessment of climate change mitigation progress and pledges. It examines the sources of global emissions and explains developments in emission reduction and mitigation efforts. It also assesses the impact of national climate pledges in relation to long-term emissions goals. This report, along with the two IPCC reports published earlier—The Physical Science Basis and Impacts, Adaptation and Vulnerability—will feed into a final report that will be published later this year.
The IPCC’s warning of potential catastrophe has not been watered down: global emissions of carbon dioxide (CO2) need to peak in the next three years, followed by “rapid, deep and immediate” cuts to reach net zero by mid-century. Immediate action is critical.
To reiterate, the IPCC’s scientists have established that global warming must be capped at 1.5 degrees Celsius (2.7 degrees Fahrenheit) in this century. That will require total greenhouse gas (GHG) emissions to be reduced by approximately 43 percent by 2030. By the early 2050s, the world will need to stop adding CO2 to the atmosphere altogether. Because existing global environmental policies will collectively reduce global emissions by only a few percentage points in this decade, stricter and more ambitious policies are needed.
The report stresses the importance of phasing out fossil fuels, citing it as the highest priority. It also explores dozens of strategies and solutions proposed by scientists and energy experts. The highlights are familiar to those who have been paying attention and are covered in comprehensive depth in the report:
- Nearly all of the world’s power plants must clean up and switch to wind, solar, nuclear, geothermal or hydropower.
- Most of the world’s coal and natural gas plants need to shut down or install carbon capture and utilization technology (CCU).
- The transport and industry segments of the global economy will need to reconfigure products and processes to run on clean electricity. Where economic activities cannot be electrified, new fuels, industrial processes and materials will need to be developed.
- Governments can and should do more to expand public transit, upgrade insulation, recycle more raw materials, and make factories more energy efficient.
- Countries will also need to address emissions from deforestation and agriculture. Diets and lifestyles will need to change, with governments doing more to encourage behavioral change at an individual level.
Many of the changes needed can be done in what Guterres describes as a “viable and financially sound manner,” provided the political will is there.
Push for Action
The report focuses on what nations, governments—and industries in particular—should and could be doing. And while the report makes it clear that industry action is essential, it does not rank solutions in terms of effectiveness or tell companies what they should do next.
Nonetheless, the onus will fall on individual companies to make changes. And while regulatory requirements are increasing (see our assessment of the SEC’s progress on climate-related disclosures), smart, innovative companies are generally still ahead of regulators. They know that the implementation timetable set by many government bodies requires them to up their game, and as regulators start to coalesce around common frameworks, the opportunity to cherry-pick and play regulatory arbitrage will soon disappear.
And while industries must act, the consumer must also play a role in mitigating the damaging effects of our reliance on fossil fuels. The IPCC report notes that the right policies, infrastructure and technology can enable consumer behavior changes—such as cycling or walking instead of driving or switching to a plant-based diet—that can bring a 40 – 70% reduction in greenhouse gas emissions by 2050.
Data Drives Delivery
Most individual companies do not know what their specific challenges are when it comes to carbon emissions or other environmental impacts. Even within a high-emitting sector like energy generation or chemical production, organizations will start from different places and find different routes to emission reduction.
Before any investment in mitigating technology is made–whether that is to reduce the carbon intensity of individual products or to overhaul entire processes—organizations need to understand their own baseline position and assess the carbon reduction potential on a material, product and activity level.
Data must be gathered and understood across the entire product or service lifecycle, and consequently up and down the supply chain. The IPCC report refers implicitly to the interconnectedness of the mission to decarbonize, but real-world implementation makes that explicit. We can expect to see more demands made of suppliers and partners, more re-routing of supply chains to reduce overall emissions impact, and transparency becoming a competitive differentiator.
Pledges and Promises Are Not Enough
If we are to take advantage of this “brief and rapidly closing window of opportunity,” then real action is called for. And real action starts with a commitment to Scope 1 and Scope 2 emissions tracking and reporting, which needs to happen before companies can address their Scope 3 emissions. Because, as the saying goes, “You can’t manage what you don’t measure.”