The IPCC’s Sixth Assessment Report, released today, is a stark reminder that dangerous climate thresholds are rapidly nearing and that impacts will continue to occur sooner than thought.
It outlines how without transformational, urgent and systemic change, we will be subject to the most extreme heat, flooding and scarcity climate impacts across the world.
This is not just another report, but the most important scientific basis for policymakers to make decisions. These new insights and its urgency should play a significant role in the G20 and COP26 negotiations and set the basis for ambition.
A summer of extremes in Europe
The report findings do not come as a surprise. With 1.1°C of warming so far, our climate has already changed, and some impacts are baked in. Science has long told us that climate change poses an immediate threat - we are now mitigating the very worst impacts.
Extreme weather events are proliferating. From Finland to Turkey, Europe is battling forest fires. Greece reached 47 °C last week – just shy of the record, while 2020 was Europe’s hottest year. Already, 1 in 8 deaths in Europe are linked to environmental factors.
Northwest Europe experienced catastrophic flooding this summer. In Germany, the human toll shocked the country: 200 people lost their lives and over 700 were injured. Towns were left without electricity, rail links, and basic services. The reality is that this kind of 'Jahrhundertflut' (hundred-year flood) will become much more than 1% likely, as the IPCC points out.
According to the European Commission, floods in Europe could cost €48 billion a year by 2100 without more preparedness, and the number of people affected could reach 350,000.
This is of course not only in Europe but globally, with devasting floods in China and heatwaves across North America and Siberia clearly caused by human-induced climate change.
Organizations reporting to CDP foresee major physical impacts. We know nearly all cities already experience floods, extreme heat and drought. And over half of European companies identify physical impacts that could cause a substantive financial or strategic impact.
A lack of timely action
Mitigating the worst of these effects means scaling up immediate, decisive action by CDP’s stakeholders to drive emissions cuts of 50% over the next nine years.
This must start immediately, with real progress over the next 5 years required. Though we have seen significant momentum since the signing of the Paris agreement in 2015, businesses, their investors, and our cities are off track.
The EU’s newly-proposed fit-for-55 package, while the most ambitious policy implementation plan globally for delivering on the Paris agreement, will still probably not put EU emissions on a 1.5°C path. 60-65% emissions reductions by 2030 is more in line with the IPCC.
In Europe, CDP data shows that corporate emissions targets are collectively tracking a 2.7 °C pathway.
Meanwhile, few cities, so often on the forefront of the climate crisis and home to 75% of Europeans, are doing enough to manage the threats of climate change. They must urgently adapt to the changing weather or risk further devastation, but our recent report found 43% of cities globally lack plans to adapt.
Among global financial institutions, though net-zero commitments proliferate, few so far are truly implementing meaningful actions, for instance by fully disclosing the enormous impact of their financing, or by setting science-based targets to reduce emissions in line with 1.5°C.
And though the International Energy Agency (IEA) has warned no new fossil fuel development can take place if the world is to reach net-zero, none of the 100 biggest oil and gas producers in the world have plans to stop exploration.
A narrowing window to limit warming to 1.5°C
Today’s publication issues a strong warning on reaching global thresholds and tipping points, beyond which unstoppable impacts accelerate. The only way to mitigate against this is rapid cuts now.
But we know that solutions do exist and if we act fast, much can be done to avoid the most catastrophic. In the IEA net-zero framework, for example, most CO2 reductions will be delivered by technology available now.
To ensure their own resilience under these scenarios, companies must urgently commit to and set science-based emissions targets (SBTs) to ensure they develop robust and credible plans that cover their entire value chain.
Momentum is strong, with over 1,600 now part of the SBTi. In a bid to spur ambitious action, only 1.5C targets will be approved from July next year. SBTs work: analysis shows companies with SBTs have an even faster decarbonization trajectory than needed to meet Paris Agreement.
Supply chain engagement is key, with upstream emissions on average 11.4x higher than direct emissions. CDP supply chain members obtain high-quality primary data and improve supplier performance, and invest significantly to develop lower-carbon, more circular products.
Capital markets must likewise setup up and play their role faster. The commitment made by signatories to the Net Zero Asset Manager initiative – now covering half of global assets – includes accounting for material scope 3 emissions, which CDP data shows are at least 700x their Scope 1 and 2.
It also means setting interim 1.5°C-aligned targets. To do that, more of the market must be investable. CDP data shows only 8% of the European market is, so investors and lenders need to engage their portfolios much more rapidly to set robust targets – as many are doing through CDP’s Science Based Targets campaign - and set them themselves.
Institutions like the European Central Bank, one of the globe’s biggest buyers of corporate debt, must support. Its new strategic review with more climate action is promising, but the devil is in the detail. It should use SBTs as an indicator and prerequisite for corporate financing going forward, in line with EU’s climate neutrality goal.
For policymakers, COP26 simply must be a Paris-agreement style success. Global NDCs are lacking, and current commitments translate into average temperature rise of 2.9°C to 3.4°C by 2100 - a terrifying prospect considering the impacts already seen at 1.1°C. Last month’s G20 did not raise hopes. Policymakers must agree on concrete measures, not just commitments, while Europe must lead to drive other countries at COP26 to set more ambitious targets.
It is critical to change course and for Paris signatories to back up pledges with concrete plans for 2030 that drive non-state action much faster, and contribute by pouring fiscal stimulus into a green recovery – something that has not gone well so far.
Biodiversity and the nature protection must sit at the heart of this agenda. Water is key for all climate strategies, yet water stress is made worse by climate impacts. Forests could deliver 30% of mitigation, yet the Amazon may already be emitting more than it absorbs. CDP’s new partnership with BNP Paribasto develop biodiversity reporting metrics is a positive start.
There is reason to be optimistic. Climate science is clear and prescriptive about the path to follow. The solutions for rapid decarbonization this decade, even in hard-to-abate sectors, are available. As is capital – particularly in Europe – and shown to be better spent on green stimulus measures. The key is that these measures happen now, not just in this decade but in the next five years.
Following another destructive summer of climate impacts in Europe, today’s IPCC report must be a final wakeup call that European businesses, capital markets, local governments and policymakers must transform and build forward better to prevent them becoming significantly worse.