The most important aspect of the latest IPCC report is that millions of people are actually engaging with it.
This report has captured the world’s attention unlike any climate change news before it.
The Intergovernmental Panel on Climate Change’s (IPCC) Sixth Assessment Report is the combined work of thousands of climate scientists who have collated and reviewed more than 14,000 scientific papers. The result is the most up-to-date and carefully researched report card on the physical impacts of climate change on our world.
And… it’s trending on twitter.
8,000 people watched dour scientists present the report on YouTube, while influencers on Instagram hosted live-feeds of themselves analysing key sections.
It’s certainly a sobering read, it offers startling evidence of the devastating impact that increasing concentrations of CO2e in the atmosphere are having on our weather systems, biodiversity, the lands and our oceans. And most worryingly, increasing temperatures will continue until at least 2050 under all emissions scenarios considered in the report. It reports that some level of rise is already locked-in, and we’re likely to breach the 1.5℃ warming threshold by 2030.
“We must reduce emissions as quickly as possible. Even if we are to reach net zero by emissions by 2050, it may not be enough to maintain a safe climate.” Says Dan Gocher, Director of Climate and Environment at ACCR, responding to the report.
For progressivee investors, this was already apparent. This report is a compilation of existing scientific studies, and I would assume that OnImpact readers, and the investors that we cover, are some of the most informed on these issues.
This report takes that story to the mainstream; there’s barely a front-page that isn’t dominated by images of bushfire flames or flooded city streets. The report offers deeply researched evidence that these impacts are caused by human activity, it finds 1.07℃ of the 1.09℃ of observed warming is due to GHG associated with human activities, largely burning fossil fuels.
The damage done by climate deniers, in slowing progress on emissions reduction, is immense, and one hopes that this report will finally put to bed these dangerous notions that we can continue abusing our atmosphere as we have since the start of the industrial revolution.
“The IPCC report is unequivocal about the cause of climate change and the accelerating damage it will do if there isn’t swift and sustainable action to end greenhouse gas emissions as soon as possible. No responsible government, company or investor can ignore these findings.” Says Rebecca Mikula-Wright, CEO of IGCC.
Pathway for investors
This is the IPCC’s Sixth Assessment Report (AR6), and this report specifically covers; the ‘Physical Science Basis’ of climate change.
Further reports will be published next year. In February 2022 they will report on ‘Impacts, Adaptation and Vulnerability’, and in March it will be ‘Mitigation of Climate Change’.
These subsequent reports will offer more insights into the impacts of climate change on our world, as well as adaptation and mitigation models that can be translated into tangible actions to reduce risks.
For investors, the rise of ESG and impact investing has been driven in large part by a very pragmatic view on the risks of a changing climate. Decarbonisation will not only make the air cleaner, but it’s now undeniable that it will also contribute to lessening the likelihood of extreme weather events, and for insurers, banks and developers, that’s a big deal.
“We’re already seeing a growing number of investors starting to shift their portfolios to align with keeping average global warming to 1.5°C. The Australian government will need to adopt stronger 2030 targets and establish policies now to ensure an orderly transition to net zero emissions by 2050 if they want our economy to remain competitive in global capital markets. Stronger climate policies in Australia will unlock around $63 billion in fresh investment opportunities to 2025.” Says Rebecca Mikula-Wright.
Decisions by investors to move ahead of government regulations have been covered widely by OnImpact. Economically, it’s a major challenge because pollution remains a public good, and in the absence of a price on carbon, polluters aren’t required to factor the damage they do to the environment into their cost of production.
We all know the political ructions that have been caused by climate policy in Australia, and despite the economic efficiency of carbon trading, or a cap-n-trade scheme, it will be impossible to implement under the current conservative government, even after the stark warning delivered by the IPCC.
If government policy won’t do the heavy lifting, there will be even greater pressure on investors (and customers) to try to influence the companies they invest in (and shop with) to reduce their emissions and accelerate the transition to renewable energy.
“Investors in these companies must take action: demand an end to all fossil fuel expansion and escalate when companies fail to act. It’s time to vote against the re-election of obstructive directors, link remuneration to emissions targets and end the greenwashing.” Dan Groch says.
Dan is Director of Climate and Environment at ACCR, and just as they’ve adapted their campaigns to a heightened climate risk, they’re also forced to respond to the growing influence of lobby groups on corporate and policy decision-making.
“Investors must also address the toxic lobbying by corporate industry associations. The Australian Petroleum Production and Exploration Association (APPEA) delivered us the ‘gas-fired recovery’, while the Minerals Council of Australia continues to falsely claim that Australian coal reduces emissions.” he says.
While nothing has physically changed today, as a result of the IPCC releasing this report (emissions are still growing, and we’re all still highly dependent on fossil fuels for transport and production) there is an undeniable shift in the mood around the challenge ahead.
The hard work done by sustainable investors, in years past, has always been hamstrung by a small but vocal group of climate deniers. But there is now renewed hope that decision-making can be led by science, and policy be led by real-world impacts on people and the planet. With COP26 looming, now’s the time to double-down on reaching-out to policy makers.
The processes and platforms that have been built to invest in decarbonisation, and to develop a more conscious form of capitalism, now have an even better chance to thrive. And in reality, they’re going to be vital to help reverse the damage that’s been done.