As the Intergovernmental Panel on Climate Change (IPCC) released the latest scientific report from Working Group III on mitigation, its co-chair, Prof. Jim Skea, did not mince his words: “It’s now or never, if we want to limit global warming to 1.5°C. Without immediate and deep emissions reductions across all sectors, it will be impossible.”
While the IPCC’s March report focused on what’s at stake if we continue on our current climate trajectory, the latest release presents what we can do about it. The consensus is clear: Rapid transformations across all sectors and systems is the only way to avoid the worst impacts of the climate crisis.
Here’s a look at our main takeaways from the latest IPCC report and how companies should take action to accelerate the science-driven sustainable transformation of their businesses.
It’s now or never, if we want to limit global warming to 1.5C. Without immediate and deep emissions reductions across all sectors, it will be impossible.
What stood out to us from the IPCC report on mitigation:
- Greenhouse gas emissions (GHG) must peak before 2025 to avoid overshooting the 1.5°C mark. In other words, we effectively have mere months to hit peak emissions. The window for action is closing rapidly and we’re far off track.
- For the first time, there’s evidence that more than a dozen countries have sustained decreases in GHG emissions over the past decade. But these gains from shifting to renewable energy have been canceled out as the average annual GHG emissions reached the highest level in human history over the last 10 years — evidence that the benefits in energy efficiency can be outweighed by the impacts of industrial growth.
- Deep, immediate reductions need to happen now across all sectors and regions. Reforestation and reversing land-use change cannot compensate for delayed emission reductions. In other words: planting trees won’t save us.
- We have all the tools we need to rapidly decarbonize the global economy. Upping the investment by three- to six-fold is necessary, but the capital exists — it just needs to be allocated to the right places. And business-as-usual places us on a far more costly path.
Four ways businesses can answer the science’s call for a sustainable business transformation
Drive consumer engagement to shift demand.
For the first time, the IPCC included a chapter on demand-side mitigation, including shifting diets or transportation patterns. It concluded with high confidence that demand-side strategies could cut global GHG emissions by 40-70% by 2050. But this won’t be possible unless companies act to accelerate — not obstruct — these changes. Businesses must be active players in informing, educating and engaging their consumers to change behaviors and influencing demand for products and services that are at odds with sustainability — even when it means a fundamental shift in the business model and the transformation of product portfolios; decoupling profitability from resource consumption. The report says behavior and cultural changes represent “a substantial overlooked strategy” left out of transition pathways and scenarios.
Activate change across the supply chain.
Some of the most powerful levers of action highlighted by the IPCC lie within companies’ supply chains. Engaging with sourcing partners and distribution channels to enable the uptake of renewable energies is one example. Another is halting deforestation, which alone accounts for 45% of emissions from the land sector (source: WRI). Procurement teams need to identify deforestation risks associated with their commodities and work closely with suppliers and stakeholders to drive greater transparency and accountability in the marketplace. Procurement decisions give companies enormous influence to shift what we produce and consume, and investing in supplier capacity-building and engagement is critical to accelerate decarbonization. Since supply chains are where most impacts are, companies that wait any longer to drive progress with suppliers are letting critical time — and emissions — slip through the cracks.
Use corporate influence to move the needle.
Awareness from both consumers and investors continues to build around companies’ failure to walk the talk on sustainability commitments behind closed doors. The IPCC report states: “The interaction between politics, economics and power relationships is central to explaining why broad commitments do not always translate to urgent action…Accelerating climate mitigation includes…overcoming resistance to policies (e.g. from incumbents in high carbon emitting industries).” It’s time for businesses to ensure their lobbying efforts are supporting — not undermining — sustainability ambitions and take a hard look at the policy engagements of the trade associations they’re part of. Shifting focus to working with peers, investors, regulators and partners to drive change in the right direction is critical.
Future-proof the business model and bring all stakeholders on board.
Avoiding a worst-case climate scenario requires abandoning the current linear “take-make-waste” economic model and transitioning to one in which goods and services are based on quality, circularity and durability. Companies need to take a serious look at their business models and build a plan to transform to operate within the limits of the planet. Every business decision made must be driven by its alignment with a resilient model and with guidance from those who hold this knowledge — sustainability leaders, scientists, experts. Leaders need to understand what’s at stake and engage with shareholders, board members and executives to align on ways to decouple current business models from the consumption of fossil- and land-based resources.
The planetary crisis is here. It’s time to trigger the crisis response.
From the COVID-19 pandemic to the invasion of Ukraine, recent catastrophes show just how nimble businesses can be when crises strike and they’re forced to act on the spot. Yet the existential threat of the climate, biodiversity and water crises before us have failed to elicit the rapid response needed. The scientific community is showing us what needs to be done to secure a future for people and planet. We have the tools at our disposal and it’s time to trigger the crisis response the science is calling for.