U.N. Climate Report Establishes New Understanding of Climate Change
The comprehensive report is authored by more than 200 scientists from more than 60 countries around the world and draws from 14,000 individual studies. Source: POLITICO
The August 9th report from the United Nations’ International Panel on Climate Change (IPCC) has laid out a stark vision for the future of the global climate. The report unequivocally states that direct impact from human activity, namely the emission of greenhouse gases, has resulted in increased global temperatures as the world has industrialized. Due to scientific and technological advances made since the previous IPCC report was published eight years ago, climate experts can now gather more precise data on temperature changes around the world — particularly in developing parts of the world, which previously lacked the capacity to measure climate data thoroughly. The comprehensive report is authored by more than 200 scientists from more than 60 countries around the world and draws from 14,000 individual studies. The authors detail both the status of our current climate in relation to the past as well as the potential impacts these changes will have on the future. Much of these possibilities depend on how seriously governments and corporations commit to lowering their emissions.
According to the report, the concentration of carbon dioxide in the atmosphere is greater now than at any time in the past 2 million years. Similarly, methane — a gas with 80 times the heat-trapping power of carbon dioxide — exists now in higher levels than at any time in the previous 800 thousand years. Experts are more certain than ever that these changes are due to the burning of oil, gas, and other fossil fuels.
The effects of these activities are far-reaching. Compared to pre-industrial levels, the global climate has already risen by 1.2° Celsius, perilously close to the 1.5° C limit set at the Paris Climate Accords. It is, as U.N. Secretary-General António Guterres said in response to the report, “a code red for humanity.” Additionally, regardless of what humanity does to counteract these trends, the world will continue to experience worsening climate-related disasters for at least the next thirty years. These incidents include droughts, heat waves, torrential rain, and flooding. Sea levels are predicted to continue rising for another 2,000 years.
However, there is still a window for humanity to mitigate climate risk. In all of the U.N.’s climate predictions, the world temperature will increase by 1.5° C. If countries mobilize rapidly to decrease emissions and reach net-zero carbon emissions by 2050, global warming may fall back below 1.5° C in the latter half of the century. If the Earth’s governments and corporations do little to change their current emission practices, global temperature may increase between 3° to 6° C.
Such an undertaking would require effort and commitment hitherto unseen in large parts of the world. Achieving net-zero by 2050 and limiting the increase in global temperatures to 1.5° C is a best-case scenario. But some organizations and companies have begun the shift.
BlackRock, the world’s largest asset manager with over $9 trillion under its management, has released multiple letters to clients and CEOs outlining its intention to fully integrate sustainability into its evaluation of potential investments. In the letter, BlackRock’s Global Executive states, “these commitments are centered on achieving net-zero.”
Companies around the world use reporting organizations such as CDP, GRI, and others to report the measures they have taken to increase their sustainability. GRI, for example, receives reports from over 15,000 companies around the world. Companies that disclose their sustainability information (such as total carbon emissions) include Apple, Coca-Cola, and Nike. Investors such as BlackRock consider how well-adjusted to climate change these companies are when making investment decisions. Companies that have not sufficiently explained their strategy to achieve net-zero carbon emissions, for example, are less likely to receive funds and more likely to have their board members voted out in favor of more climate-conscious candidates.
Climate risk is becoming an integral part of a company’s general risk assessment. These concerns have reached even the biggest players in the energy sector; the (comparatively) minor activist investor Engine No.1 won three seats on Exxon’s board after convincing other investors that the energy giant was not adequately prepared for the future of climate change.
It remains to be seen how quickly these new sentiments regarding climate change in corporate investing will spread and to what degree they will change current practices regarding energy and carbon emissions. According to the U.N., the consequences of failing to combat climate change will be disastrous. Such a monumental mobilization will require sustained effort from both the public and private sectors in the U.S. and across the world. However, current trends in the private sector are at least mildly optimistic and are positive indicators that companies are taking responsibility for their effects on the environment. Although the consequences are more dire than ever, it seems as though climate change has never been taken as seriously as it is now.