The UN Intergovernmental Panel on Climate Change’s latest report concludes that the impacts of climate change are severe, but that humanity can still avoid many of them if it seizes “a brief and rapidly closing window of opportunity”.
This summary highlights the main points in the IPCC report, and what it means for non-executive directors
What is the report?
The Intergovernmental Panel on Climate Change (IPCC) is currently in its Sixth Assessment Cycle, during which its three Working Groups produce reports summarising the evidence base underpinning different aspects of climate change. These contributions feed into the Sixth Assessment Report (AR6), which is due for completion in September 2022.
Working Group I released its report explaining the physical impact of human activity on the climate in August 2021 – read our summary here. This summary covers Working Group II’s contribution, Climate Change 2022: Impacts, Adaptation and Vulnerability, which focusses on the impacts of climate change on human society and the environment. The report also addresses vulnerability and resilience, explaining the importance of adaptation efforts to climate change. It was released on 28 February 2022.
What does the report say?
Since its last assessment report, the IPCC has analysed a large volume of research to conclude that the impacts of climate change are severe, but that humanity can still avoid many of them if it seizes “a brief and rapidly closing window of opportunity”. The report focusses on three interconnected systems – the climate, ecosystems, and human society. Since each system influences the other, managing risks across all systems is vital to avoiding the worst impacts of climate change.
Climate change has already impacted many human systems and these impacts will become more severe as global temperatures rise. Specific impacts and risks include:
- Economic damage to key sectors such as energy and agriculture, and lower labour productivity.
- Damage to property, infrastructure, and livelihoods in urban areas due to risks including flooding, heat extremes, and air pollution.
- Lower crop productivity and fishing yields, particularly in the developing world.
- Higher occurrence of health risks including infectious diseases, malnutrition, and mental health issues.
The IPCC estimates that 3.3 – 3.6 billion people are currently highly vulnerable to climate change, and those people are disproportionately from less-developed areas. The number of people and ecosystems exposed to climate risk is increasing, in part due to unsustainable development patterns. As climate impacts on society and the environment are interconnected, climate change presents many ‘compound risks’. The IPCC highlights that this can cause severe problems for global markets and supply chains.
Although near-term action to reduce emissions cannot eliminate all climate risks, it can significantly reduce them. In the long-term, limiting warming to 1.5 degrees will avoid many severe risks. Increases in temperature, sea level, and the frequency of weather extremes cause direct hazards to society, and also damage ecosystems that provide valuable services to society. This is true even if global temperatures are later brought back down below 1.5 degrees as some impacts, such as the degradation of the Amazon Rainforest, are irreversible.
Adaptation is central to the global response to climate change. Taking action to reduce vulnerability and exposure to climate risk can actually be more impactful on near-term climate risks than reducing emissions. Adaptation measures can also support climate mitigation, for example use of nature-based solutions to reduce heat stress and surface water run-off, which also serve to absorb CO2. The report emphasises that adaptation efforts have already helped to mitigate some impacts on people and ecosystems, but much more work needs to be done. Properly adapting to climate impacts will require “Integrated, multi-sectoral solutions that address social inequities, differentiate responses based on climate risk and cut across systems”. The IPCC also warns of ‘maladaptation’ – negative impacts caused by inadequate responses to climate change. Maladaptation is particularly likely if solutions focus narrowly on specific sectors or take a short-term view of climate risk.
Working Group II’s contribution ends by looking at ‘climate resilient development’, which “integrates adaptation measures and their enabling conditions with mitigation to advance sustainable development for all”. The path to achieving climate resilient development has already narrowed significantly and becomes more difficult with each increment of warming, but it can still be achieved with collaborative and cross-cutting action from governments, communities, and the private sector. The IPCC notes that financing mitigation and adaptation efforts is a key enabling condition for climate resilient development, but that current financial commitments are insufficient.
What does this mean for non-executive directors?
The IPCC confirms that the private sector plays a large role in the climate crisis – businesses contribute to climate change and will suffer from its negative impacts but will also be a key part of the solution. As business leaders, NEDs can help their boards identify and address the risks and impacts within their direct operations, but should also consider the broader impact on mitigation and adaptation efforts. This report addresses broad and far-reaching aspects of climate change, from which businesses can take some key messages for action:
- Take up opportunities to collaborate with other businesses, NGOs, and public sector organisations on climate change, and take an inclusive view of climate risk. Climate risks are interconnected, and climate solutions need to be inclusive and integrated.
- Ensure that your business’ impact on low-income and vulnerable communities is central to discussions about sustainability, giving attention to loss and damage impacts from climate exposure and exploring how your business could support investment to address this unresolved issue. The report confirms that low-income and marginalised groups will need the most support in managing and adapting to climate impacts.
- Understand how your business can protect its assets from climate change, consider how global adaptation efforts might influence supply chains, and ensure that these efforts consider all stakeholders with a long-term outlook in order to avoid maladaptation. Adaptation to climate impacts is vital and can be more important than mitigation in the short term, but corporate climate strategy is often heavily focussed on reducing emissions.
- Encourage your business to support decarbonisation and adaptation efforts both within and outside of its value chain. The private sector will play a key role in financing and deploying measures to mitigate and adapt to climate impacts.
- Consider how your business can support further research on the economic and financial impacts of climate change to help businesses better manage these risks.
Climate Change 2022: Impacts, Adaptation and Vulnerability (including the summary for policymakers, technical summary and full report)