A Survival Guide for Corporates in a Climate Emergency – Lessons from the IPCC AR6 Report

As the release of the Sixth Assessment Report (AR6) by the Intergovernmental Panel on Climate Change (IPCC) signalled a "code red" for humanity, companies are under increasing pressure to rapidly address climate change. GCX looks at 7 things companies can do to fast-track their climate strategies.

By Kevin James and Tala James

Recently, the sixth assessment report (AR6 report) of the Intergovernmental Panel on Climate Change (IPCC) was published. The purpose of the IPCC is to provide periodic climate assessments and insights that are crucial resources for world leaders and scientists to better understand the trajectory of climate change and what’s required to adequately respond to this mammoth challenge.

Well, the good news is they didn’t say anything we didn’t already know. The bad news, however, is that even with urgent immediate action it’s just too late to reverse some of the damage already inflicted on the environment.  

Furthermore, the report provides unequivocal evidence directly attributing extreme weather events to the influence of human activities. These climate disasters, including deadly wildfires and floods in Europe, droughts in Madagascar, supercharged cyclones (Hurricane Harvey) and extreme heatwaves are predicted to only increase in severity and frequency but in a way that has never been witnessed before.

So, what do we do?  Three main things are worth mentioning:

  1. It seems the “keeping below 1.5°C” goal is no longer a possibility (sorry Paris Agreement) and we will struggle to keep below 2°C as well with our current emissions trajectory and lack of urgency.
  2. The world has no choice but to decarbonise and achieve net-zero carbon by 2050. We are in an objective state of emergency, and it is the responsibility of every individual to hold their leaders accountable in ensuring future survival on this planet.
  3. While all efforts to reduce CO₂ in pursuit of net-zero need to happen post-haste, extra special efforts and funding need to be directed at regeneration and carbon sequestration projects. These projects aim to suck CO out of the atmosphere back into our carbon sinks, forests, and oceans.

GCX sits at the epicentre of this reality in dealing with corporate responses to climate change. Having done this for the better part of 14 years, we are a good barometer for gauging the maturity and enlightenment of the enthusiastic response from companies in the leader quadrant. But we are also severely frustrated by the inertia and procrastination of the long tail of laggards that have yet to understand and feel the urgency expressed by the AR6.

We are seeing a massive uptick in companies doing their carbon footprint calculations for the first time, which is a big step in the right direction but not big enough. These companies need to expedite things and speed up their programs if they want to change their legacy of destruction before it’s too late.

In the latest World Benchmarking Alliance assessment of the world’s top 350 food companies, the extent of this procrastination becomes very apparent. Being a sector that is probably the most vulnerable to the impacts of climate change and that is extremely important for a safe, equitable functioning society the results are very revealing.

Of the 350 companies, 188 (53%) had no targets at all while only 26 companies (7%) had set and were actively tracking a 1.5°C science-based target that aligns with the outcome of this sixth assessment report. The other 40% are either reporting without targets, or with targets in equal numbers. 

Given that the Agri/food production sector is one of the highest impact sectors, after the fossil fuel sector, this complacency is just not good enough. Having this knowledge, we should all be severely concerned.

Right now, not only do we have irrefutable evidence that our current way of doing everything, has created a climate emergency of immense proportions – but we have proof that the perpetrators are still dragging their feet. 

Ok, so what’s going to make the difference? How will this change?

The first drum that cannot be beaten enough, is the “leadership” drum. This is where the rubber hits the road – the difference between proper traction and wheel spinning. Having a CEO, CFO being the champions of ESG and climate change makes all the difference to a climate program.

AR6 emphasises the urgency for us to start substantially reducing our carbon footprint NOW and achieve net-zero by 2050 if we want to avoid exceeding the 1.5°C warming threshold.

Such a commitment requires bold leadership where the carbon reduction of the company becomes embedded in the company’s culture. Fulfilling this moral obligation can no longer be a branding strategy but rather an authentic response in taking responsibility for their contribution to the problem.

The following are the top 7 things I recommend companies address to fast track their strategies in response to the climate crisis:

  1. It’s time for companies to start seeing and treating climate change as an emergency, and as a massive risk to their future.
  2. To do this, companies need visibility which means more than an annual carbon footprint assessment, a glossy ESG report and someone with a spreadsheet in between.
  3. Make sure that someone in the C-suite is responsible for the organisation’s climate change strategy.
  4. Ensure that the sustainability function within a company is well positioned internally and that there are clear lines of accountability.
  5. Ensure that the company sets aside sufficient budget and fills any gaps in skills and capabilities required to be successful.
  6. Make sure people are incentivised to set and meet targets that align with the science we already know.
  7. Track and benchmark everything monthly. If you have not already digitally transformed your business in such a way that allows you to analyse and report on your sustainability data accurately and in real-time then you are behind the curve and must feel a sense of urgency to catch up.

If these questions cannot be answered in your business, then you need to act now. We simply cannot continue with the procrastination of the last decade. The IPCC has been warning people for years that if we continue the way we are, we will compromise the ability of future generations to meet their needs for survival on this planet. Their message now is clearer, more informed, and more confident than ever. It’s time for action and for every company to take responsibility for their bit and more.

The good news is that we can solve the climate crisis as well as every other environmental and societal ill. We are advanced and smart enough. We are currently in the thick of the fourth industrial revolution. By leveraging the digitalisation of basically everything through artificial intelligence, machine learning, blockchain, cryptocurrencies, robotics, IoT and automation, we can literally track and verify the impact of everything across an entire supply chain.

Add to this the even more exciting fifth industrial revolution which combines humans and technology where there is a common purpose: embracing innovation toward a more inclusive and conscious society. Essentially, we can leverage technology to solve world environmental, social and governance issues.

These are indeed the most exciting industrial revolutions of our time as they will enable us to fix this beautiful planet and our potentially wonderful existence on it.

At GCX we recognise that companies and the people that work in them can only take responsibility for their wider impacts if they are aware of these. Everything needs to be accurately measured before things can be changed and improved.

The time is now and a good place to start is by talking to us.

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