Last reviewed 10 May 2022

Laura King looks at the main messages from the third instalment of the Intergovernmental Panel on Climate Change's (IPCC’s) Sixth Assessment Report and what actions businesses need to take.

The IPCC’s latest report has again issued a stark warning about the urgency of change needed to keep global warming within the ambitions of the Paris Agreement. “It’s now or never, if we want to limit global warming to 1.5°C,” said IPCC Working Group III Co-Chair Jim Skea.

Indeed, scenarios modelled show that the window of opportunity is extremely narrow. Limiting warming to around 1.5°C requires global greenhouse gas emissions to peak before 2025, and be reduced by 43% by 2030. Net zero needs to be achieved globally by the early 2050s.

Even at 2°C timeframes are tight. Here, the assessment still requires global emissions to peak before 2025 and reduce by 25% by 2030. Net zero will need to be achieved in the early 2070s.

“Without immediate and deep emissions reductions across all sectors, it will be impossible,” said Skea.

However, there is hope. “We have the tools and know-how required to limit warming,” said IPCC Chair Hoesung Lee, who added: “I am encouraged by climate action being taken in many countries. There are policies, regulations and market instruments that are proving effective. If these are scaled up and applied more widely and equitably, they can support deep emissions reductions and stimulate innovation.”

Which report has been published?

The report, Climate Change 2022: Mitigation of Climate Change, is the third instalment of the IPCC’s sixth assessment report. The first report was published in August 2021 and outlined the science of climate change. The second report was published in February 2021 and outlined the impacts of climate change and what adaptation was needed.

This third report covers the progress of climate change mitigation actions and pledges to date, highlighting the solutions needed to cut emissions at scale. A final summary report is expected in September 2022.

What are the main messages?

The report is clear that deep cuts are needed and are needed now. The changes required include the following.

  • A complete shift to low or zero carbon energy sources, such as renewables, needs to be achieved by 2050, with any fossil fuel generation requiring carbon capture and storage (CCS).

  • Current global plans for fossil fuel infrastructure will result in the world exceeding the 1.5°C target, and so strategies need to be adopted to reverse this.

  • Significant efforts need to be made to reduce emissions in industry. As well as implementing circular economy principles and driving efficiency in both energy use and material demand, deploying technologies such as CCS in sectors like cement and switching to new low and zero-emission industrial processes will also be necessary. This will not be easy. The IPCC states this will require 5–15 years of “intensive innovation, commercialization and policy”.

  • Urban areas will need to transform. Reducing emissions from transport will be key through the provision of car-free infrastructure, as well as the electrification of vehicles.

  • Buildings will need to be retrofitted or built to improve efficiency and barriers to decarbonisation need to be removed, such as incentivising the development of green building codes.

  • Transport needs to be decarbonised, through a shift to more energy-efficient modes of transport and the electrification of vehicles. Where electrification is difficult, for example in shipping, other fuels will need to be developed such as low-emission hydrogen. However, improvements are still needed in the production processes for these fuels.

  • Improvements to our food systems and the protection of nature is also required. Stopping carbon loss by protecting and sustainably managing key habitats such as forests is one element of this. Shifting to lower-carbon food systems — through actions such as reducing the impact of food production, reducing food waste and changing diets — is also key.

What can businesses do?

The reality is that companies have a clear and significant role to play in meeting the mitigation and adaptation goals required to limit global warming to 1.5°C. Efforts on both adaptation (covered by the second report) and decarbonisation need to be accelerated.

Set realistic targets and accelerate efforts

There has been a huge surge in net-zero commitments. However, according to CDP, although almost 90% of GDP is covered by net-zero commitments, only one third of companies disclosing to CDP have developed a low-carbon transition plan and fewer than 35% of companies’ emission reductions targets are considered credible.

For these commitments to be worthwhile it is imperative that net-zero commitments are backed with a plan for how they will be achieved, as well as realistic science-based targets. This can be achieved through the Science Based Targets initiative’s (SBTi) Net-Zero Standard, and the Carbon Trust has also recently launched its Route to Net Zero Standard as a way for organisations to embark on the net zero journey and be certified along the way.

Climate resilience

Our climate will change. Along with that change will come changes to our natural ecosystems and the knock-on effects on global supply chains, operations and legislative obligations. This remains the case even if operations are contained strictly within the UK.

For example, before COP26 the Environment Agency issued a stark warning to “adapt or die” as it published its third adaptation report in which it warned that: “Significant climate impacts are inevitable,” while making it clear that the Environment Agency alone cannot protect everyone from increasing risk.

To manage these risks, climate resilience needs to become a strategic priority. This can be done by evaluating a number of scenarios and mapping out physical, operational and strategic risks and opportunities.

The Task Force on Climate-Related Financial Disclosures provides recommendations on what should be looked at, as well as best practice for disclosure in company reporting.

Look at green skills gaps

For change to happen, everyone in the organisation needs to understand why a low carbon future is essential. Although “green skills” are often spoken about in relation to emerging jobs, such as wind farm engineers, it can also apply to people within the organisation that are not in typically “green” jobs. Marketing, finance, procurement — all of these specialisms will need to adapt and input into the changes the organisation will need to make.

Identifying what skills people have, where there are knowledge gaps and what is needed in terms of training will be essential to allow the organisation to move forward.

Behaviour change

For the first time, the IPCC included a section on how to manage the demand side of carbon, in essence, what we consume and why we consume it.

Companies and organisations play a vital role in changing our behaviours and helping us limit our carbon impact. From a workplace point of view, this can include helping people shift to lower carbon diets and encouraging active transport (such as cycling and walking). In terms of products and services, it can include designing products with more material and energy efficiency, considering the longevity of products, and how to incorporate circular principles.

Summary

  • Peak emissions need to occur before 2025 if we are to meet the Paris ambition to limit global warming to 1.5°C.

  • Even with this amount of warming, our world will face significant change: ecosystems will break down and weather extremes will bring increasing risk.

  • The IPCC’s latest report outlines what mitigation actions need to be taken. It concludes that we have the technology, but that immediate and deep reductions in emissions are needed.

  • Organisations need to move beyond net-zero commitments, to establish credible transition plans and accelerate their efforts. Other actions include making climate resilience a strategic priority, ensuring everyone in the organisation has the skills to meet net zero ambitions and that all opportunities to reduce carbon in operations, products and services are taken.