The Next Economy
IPCC to Global Business and Government Leaders:
The Jig Is Up

Six months ago, the Intergovernmental Panel on Climate Change (IPCC) released part one of its Sixth Assessment Report (AR6), which presented irrefutable evidence of humans’ effect on the changing climate and was deemed by many as a “code red for humanity.” Part two, released Monday, provides further detail about just how far we’re careening off the proverbial rails and our ever-narrowing window for getting back on a habitable track. But Climate Change 2022: Impacts, Adaptation and Vulnerability provides deeper insight into a potential path forward — it recognizes the interdependence of climate, biodiversity and people; and integrates natural, social and economic sciences more strongly than earlier IPCC assessments.

“This report is a dire warning about the consequences of inaction. It shows that climate change is a grave and mounting threat to our wellbeing and a healthy planet,” said IPCC Chair Hoesung Lee. “Our actions today will shape how people adapt and nature responds to increasing climate risks.”

Urgent action required to deal with increasing risks

Synopsis: The world faces unavoidable multiple climate hazards over the next two decades with global warming of 1.5°C (2.7°F). Even temporarily exceeding this warming level will result in additional severe impacts, some of which will be irreversible — and the imminent risks for society will only increase.

Destructive weather-related events of increasing frequency and severity are already exceeding our ecosystems’ tolerance thresholds, driving mass mortalities in species such as trees and corals. These weather extremes are occurring simultaneously — causing cascading impacts that are increasingly difficult to manage — and have exposed millions of people to acute food and water insecurity, especially in developing areas.

To avoid mounting loss of life, biodiversity and infrastructure, ambitious, accelerated action is required to adapt to climate change, at the same time as making rapid, deep cuts in greenhouse gas emissions. So far, progress on adaptation is uneven and there are increasing gaps between action taken and what is needed to deal with the increasing risks. These gaps are largest among lower-income populations — where funding and infrastructure lag far behind the levels needed to implement climate-resilient solutions.

Safeguarding and strengthening nature is key to securing a livable future

The new IPCC report echoes a landmark 2019 report commissioned by the UK government, which called for the expanding and improvement of protected natural areas, increased investment into nature-based solutions, the creation or improvement of policies to eliminate damaging consumption of natural assets, and the incorporation of natural capital accounting and proper valuation of ecosystem services into all national accounting systems.

“Healthy ecosystems are more resilient to climate change and provide life-critical services such as food and clean water,” said IPCC Working Group II Co-Chair Hans-Otto Pörtner. “By restoring degraded ecosystems and effectively and equitably conserving 30-50 percent of Earth’s land, freshwater and ocean habitats, society can benefit from nature’s capacity to absorb and store carbon; and we can accelerate progress towards sustainable development — but adequate finance and political support are essential.”

“The IPCC’s report on the impacts of climate change paints a dire picture. The silver lining is that we can still do something about it,” says Stephanie Roe, Global Lead Climate Scientist at WWF. “Every fraction of a degree matters in avoiding more severe impacts. Urgent action is needed in deploying adaptation measures and limiting warming to 1.5°C. The report highlights that healthy, intact ecosystems play a very powerful role in buffering against climate impacts and regulating our climate system. Effective global conservation is therefore a critical component of mitigating climate change and ensuring a more climate-resilient future.“

The IPCC scientists point out that climate change interacts with global trends such as unsustainable use of natural resources, growing urbanization, social inequalities, losses and damages from extreme events and a pandemic, jeopardizing future development.

“Our assessment clearly shows that tackling all these different challenges involves everyone — governments, the private sector, civil society — working together to prioritize risk reduction, as well as equity and justice, in decision-making and investment,” said IPCC Working Group II Co-Chair Debra Roberts. “In this way, different interests, values and worldviews can be reconciled. By bringing together scientific and technological know-how as well as Indigenous and local knowledge, solutions will be more effective. Failure to achieve climate-resilient and sustainable development will result in a sub- optimal future for people and nature.”

An ever-narrowing window for action

The report points out that climate-resilient development is already challenging at current warming levels — and will only become more so, if warming is allowed to continue unabated. This key finding underlines the urgency for decisive climate action, focusing on equity and justice, from both the public and private sector. Adequate funding, technology transfer, political commitment and partnership across sectors will lead to more effective climate change adaptation and emissions reductions — in developed as well as developing economies.

“The IPCC’s report … is a wake-up call to businesses to put climate change risk at the front and centre of strategy planning. Any company that thinks it is insulated from the risks outlined in the IPCC’s report, or that these are distant issues for the developing world, is mistaken,” says Will Jenkins, Director at Carbon Intelligence. “The interconnectedness of global supply chains and commodity markets, highlighted by both COVID and recent energy price shocks, means these impacts will reach every geography, and every type of business.

“The businesses that will thrive are those with a robust strategy to mitigate climate change through a net-zero transition plan with near-term and long-term science-based targets, and those that are working with a sustainable business model that considers planet and people as well as profit. If your business is only taking small steps, it is at best maintaining the status quo. To have a positive impact in these unprecedented times, radical, long-term thinking is required.”

This type of long-term thinking is seen in newer business models such as that of Too Good to Go, the world’s largest business-to-consumer marketplace for surplus food. Working to eliminate the egregious amount of food wasted around the world each year is a critical step in fighting climate change.

"The latest IPCC report underscores the need for us to move and move quickly as a global community," says Too Good to Go co-founder Lucie Basch. "To truly have an impact in the fight against climate change, we must take immediate steps, both easy and hard, to reduce the vast amounts of waste our world is currently creating. 1/3 of the world's food goes to waste, which contributes to 10 percent of global greenhouse gasses. By working collectively to address this issue and create tangible, sustainable solutions, we can move the needle in the fight against global warming before the window for action closes."

“[The IPCC]’s stark depiction of escalating climate impacts should light a fire under governments and corporates in the high-emitting economies most responsible for climate change, whose lack of action to date disproportionally affects the most vulnerable across the planet and pushes the world ever closer to a point of no return,” says Nicolette Bartlett, Chief Impact Officer at CDP. “Companies must prepare themselves for the impacts of climate change and show that they can adapt; be it through resilient supply chains or business models, efforts toward adaptation are now the minimum requirement for survival. Measuring and managing environmental risks through disclosure will help to build resilience and plan for the future. There are a wealth of frameworks and standards to guide corporates through that process in line with best practice.

“[The IPCC’s] findings should make a focus on immediate emission reductions even more critical," Roe added. "Credible transition plans toward a net-zero future must include increasing and tracked adaptation measures if they are to be truly effective — alongside robust, science-based 2030 targets. The reality remains that companies need to halve emissions by 2030 if we are to have any chance of limiting global warming.”

Read more insights from the IPCC Sixth Assessment Report here.