On March 20th 2023, the UN’s scientific body on climate change, the IPCC, published its latest assessment report – “A Survival Guide for Humanity”, the last report of its kind we will receive ahead of 2030.
This Sixth Assessment Report (aka AR6) is a comprehensive and grand synthesis of the latest and most important science on climate change aimed at guiding governments, policy, and decision-makers over the next few critical years of urgent climate action. The headline message is clear: the window of opportunity to secure a liveable future is rapidly closing and some impacts are already so severe they cannot be adapted to.
The UN secretary general, António Guterres, said: “This report is a clarion call to massively fast-track climate efforts by every country and every sector and on every timeframe. Our world needs climate action on all fronts: everything, everywhere, all at once”.
What are AR6’s main messages?
- Climate change is not a future threat, it’s happening now. We are currently at around 1.1°C of warming and, with current climate policies, global average temperatures are projected to increase by 3.2°C by 2100.
- To keep within the 1.5°C limit established in earlier reports as the target level of “safe” warming, emissions need to be reduced by at least 43% by 2030 compared to 2019 levels, and at least 60% by 2035. This is why the 2020s is seen as the decade of decisive action.
- Adverse climate impacts are already more far-reaching and extreme than anticipated. Whole regions are facing or fast approaching ‘hard’ limits to adaptation – where climate impacts are so frequent and severe that existing adaptation strategies are insufficient to fully avoid losses and damages.
- These losses and damages will disproportionately affect the poorest and most vulnerable populations, particularly those in Africa and least-developed countries, creating more poverty and geopolitical tensions.
- There is no future for coal, oil, or gas: The message is clear, we need to stop burning fossil fuels as fast as possible. However, public, and private finance flows for fossil fuels are still greater than those for climate adaptation and mitigation.
- There are patches of positive progress like 18 countries reporting emissions decrease for more than a decade through advancements in halting deforestation, increasing efficiency, and deploying cleaner technology. But these steps in the right direction are still vastly outweighed by the lack of progress elsewhere.
The growing gap between ambition and action
National and corporate climate commitments have expanded and increased in ambition in recent years. However, the report finds that pledges and policies remain grossly insufficient. We need to rapidly increase the ambition and greatly accelerate their execution.
Accenture’s own research showed that among the world’s largest 2000 companies by revenue, only 34% had set a net zero target as of June 2022. That same analysis found that only 7% of those with net zero targets are reducing emissions at a pace that would see them meet their own targets. Doubling and even tripling the current speed of decarbonisation would still see a minority attain their reduction goals. With 3 billion people already living in areas ‘highly vulnerable’ to climate change, there is no more time left to waste.
Not all is lost, Hoesung Lee, the chair of the IPCC, said: “This synthesis report underscores the urgency of taking more ambitious action and shows that, if we act now, we can still secure a liveable sustainable future for all.”
Action businesses can take today
- Reduce operational emissions: The number one priority for businesses should be to take immediate action to reduce direct operational emissions. There are low-cost, high-impact initiatives that improve the energy and material efficiency of operations, reduce costs, and save carbon. By integrating energy and emissions data with operational and financial data you can identify the low-hanging fruit with immediate payoffs. For example, switching to renewable energies can deliver, in many jurisdictions, the double benefit of both cost and emissions reductions.
- Disclose progress: Reporting transparently on the progress made against near-term and long-term science-based targets. In 2021, the SBTi released the definitive Net Zero Standard that requires companies to set a long-term target to reduce emissions by 90%. The SBTi reported that organisations with validated science-based targets have proven monumental reductions are possible – cutting scope 1 and 2 emissions by 12% on average year on year – greater than the 7.6% year-on-year reductions required to achieve the Paris Agreement’s 1.5°C goal.
- Develop a climate transition plan: A transition plan is a time-bound action plan that organisations publish to provide stakeholders with details on its strategy to decarbonise and, significantly for board members, demonstrate how its business will remain viable in an uncertain climate future.
- Align with TCFD: Disclose to the TCFD recommendations, and assesses your business’s ability to respond to climate-related risks and opportunities in different climate scenarios. This will support you to make better-informed decisions on where and when to allocate your capital as well as better evaluate risks and exposures over the short, medium, and long term.
- Educate the c-suite: Upskill directors so they have sufficient knowledge and expertise to make the right decisions, understand the most material risks and opportunities, set the right strategy then oversee and govern the delivery.
- Set an internal carbon budget: This will ensure that carbon emissions form part of internal decision-making such as procurement and drive emission reductions.
- Become a force multiplier: Invest and collaborate across your value chain. Work with suppliers to set their own climate targets and work with industry partners to find innovative solutions to challenges in your sector. This will catalyse climate action and carbon reduction up and down your value chain, reducing your own indirect (Scope 3) emissions.
- Carbon removals: Lastly, develop a transparent, portfolio approach to carbon removals that offer co-benefits. The IPCC found that all pathways that limit warming to 1.5C depend on some quantity of carbon removal and in the near term can support and accelerate societal net zero. Organisations should focus immediate efforts on reducing emissions, however, those investing in high-quality removal programmes should take an approach that encompasses natural solutions alongside research into carbon capture and other nascent technologies. Carbon removals should form only part of your strategy and never be prioritised above decarbonisation and collective action.
Every moment we delay action, the corrective and adaptative measures become harder and costlier. And for every fraction of a degree of additional warming, the worse the impacts get.
The task ahead for all is a credible plan for climate transition; to transform and lead with purpose. This means making tough decisions and committing to sustainable business transformation that involves rewiring the mission and operations of your business and your value chain.
At Accenture, we have the people, the technology, and the expertise to transform your business at scale. If you’d like to speak to our team, contact us.