The IPCC raises the alarm: impacts of climate change are here, so take action now

“The scientific evidence is unequivocal: climate change is a threat to human well-being and the health of the planet. Any further delay in concerted global action will miss the brief, rapidly closing window to secure a livable future.”

That is the key message of the latest Intergovernmental Panel on Climate Change (IPCC) Climate Change 2022: Impacts, Adaptation & Vulnerability report. It warns that we are already experiencing the devastating impacts of climate change, and continuing on our current trajectory would be catastrophic.

Heat waves and droughts have become more frequent and intense. Storms have gotten stronger, while sea levels are rising and oceans are becoming warmer. This is already causing serious damage to ecosystems, human health, businesses, and economies around the world.

These effects are clearly laid out by scientists from the IPCC in the report, which highlights the current impacts and future risks if action is not taken to tackle the climate crisis. Soberingly, as IPCC reports take between five and seven years to compile, this current assessment is likely to be its last while there is still a chance of preventing catastrophe.

Urgent and decisive climate action must be taken today. For corporates and financial institutions, this means making significant emissions cuts immediately and at least halving emissions by 2030 to help stabilize global temperatures and put us on track to limit warming to 1.5°C. Science-based targets provide a pathway to do this - and the Science Based Targets initiative (SBTi) is working to enable more companies throughout the world to seize this opportunity.

The climate crisis is happening now - and companies are affected

The IPCC report highlights that the pace and scale of climate impacts are accelerating rapidly. For companies and financial institutions, this means widespread disruption to business at all levels: to market value and the loss of assets, increased unknown risks in investment portfolios, supply chain disruptions, increasingly stringent regulations, and worsening workforce wellbeing… the list goes on. For example, the report identifies economic damages from climate change that have already been detected in climate-exposed sectors such as forestry, fishery, energy, tourism and outdoor labour productivity. It also notes the increasing economic vulnerability of assets to extreme climate hazards.

The coming decades will shape our planet’s future, and if we continue on our current path, limiting warming to 1.5°C will become an impossibility. This is why the IPCC has emphasized the need for collaboration between business, governments, cities and civil society, reinforcing each other to take climate action to the next level, and build a sustainable and resilient future.

Companies with science-based targets have demonstrated that emissions reductions in line with climate science are both achievable and good for business. Between 2015 and 2019, companies with targets validated by the initiative cut emissions by 25% compared with an increase of 3.4% in global energy and industrial emissions. This has created numerous business benefits including improved brand reputation, increased investor confidence, and greater resilience to regulation. But more action is needed - and the SBTi will do all we can to support it.

Evolving the SBTi to scale up climate action

Since its inception in 2015, the SBTi has evolved into a movement covering nearly 20% of the global economy, and a recognized global standard setter for climate targets. To enable increasing growth in corporate science-based targets, we are evolving our leadership structure, governance and operating model in a way that ensures continued independence and rigour of our standard setting and target validation framework. We will provide more details on this work over the coming months.

Global uptake of science-based targets

Growth in science-based targets has so far focused in specific regions: particularly in Europe, the United States and Japan. There is still a significant regional gap, with fewer companies from developing regions such as Southeast Asia, Africa and Latin America. But as the IPCC report highlights, climate risk does not respect international boundaries, and what’s more, countries in these regions represent ‘hotspots’ that are particularly vulnerable to climate change. To address this, the SBTi launched our Country Activation Project in 2020. The project aims to reduce barriers to adoption by mobilizing local partners to engage businesses in the transformation to a net-zero economy. This will demonstrate to peers and investors that the corporate sector in developing countries is also willing and able to cut emissions in line with climate science.

Strengthening financial sector pathways to net-zero

To support the long-term 1.5°C goal, the SBTi is continuing to develop tools and resources to help companies and, importantly, financial institutions in their decarbonization towards net-zero. Speaking at the launch of the IPCC report, the UN Secretary General emphasized the role of financial institutions in mitigating and adapting to climate change. The finance sector is an engine for change. In the coming weeks, we will build on our Corporate Net-Zero Standard with a new Foundations for Net-Zero for Financial Institutions paper. This will provide the groundwork for a full Net-Zero Standard for Financial Institutions, which is due to be released in 2023. And, in early April, we will host an online learning session covering the Net-Zero Standard criteria and the step-by-step process for setting science-based net-zero targets.

No time to waste

There is no time to lose. During the launch of the IPCC report, the UN Secretary General warned that “delay means death”. To tackle the devastating effects of climate change and address the threats to business that the report implies, the corporate sector must take urgent and ambitious action now by setting science-based targets in line with a 1.5°C and net-zero future. Find out more and set a target for your business here.

To support this transition, I will be providing regular updates on the SBTi’s progress and developments in strengthening our response to this challenge. In particular, our forthcoming progress report will demonstrate the impact of science-based targets, and highlight future opportunities.

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