What the IPCC Sixth Assessment Report Means for Corporate Sustainability
By Ecolytics Team
March 24, 2023
5 min read
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On Monday, the UN Intergovernmental Panel on Climate Change (IPCC) published the final installment of its Sixth Assessment Report. The document, known officially as the AR6 Synthesis Report, contains no new data but summarizes the findings of the previous three Working Groups Assessment Reports (WGI – The Physical Science Basis, WGII – Impacts, Adaptation and Vulnerability, and WGIII – Mitigation of Climate Change) and three Special Reports (Global Warming of 1.5°C, Climate Change and Land, and The Ocean and Cryosphere in a Changing Climate). The stark conclusion of the IPCC’s latest report makes the call for immediate and systemic climate action more urgent than ever. This final warning has been issued while there is still a chance, albeit slim, to limit global warming to 1.5°C – the temperature target set by the Paris Agreement to avoid the most severe impacts of the climate crisis – by the time the next IPCC assessment is completed in five to seven years.
Key Takeaways from the IPCC AR6 for Businesses
The report highlights the devastating effects of climate change and the urgency for immediate and sustained action to mitigate its impact. At Ecolytics, we summarized some key takeaways for businesses:
The Earth is warming faster than previously estimated: The report reaffirms that human activities, primarily the burning of fossil fuels, are driving global warming. The report indicates that global temperatures are likely to rise by 1.5°C by the 2040s, a decade earlier than projected in the IPCC's previous report.
Climate change is already causing severe impacts: The report details the significant and widespread impacts of climate change happening today, such as rising sea levels, bleaching coral reefs, more frequent heatwaves, wildfires, and extreme weather events, resulting in economic losses, displacement of people, and destruction of ecosystems. These impacts are likely to intensify and become more widespread in the coming decades.
Urgent action is needed to limit warming to 1.5°C: The report emphasizes that limiting global warming to 1.5°C is still achievable but will require “deep, rapid, and sustained” reductions in greenhouse gas emissions. Businesses must prioritize and accelerate efforts to reduce their emissions and transition to a net-zero economy.
Net-zero emissions by mid-century is critical: The report highlights that reaching net-zero emissions by mid-century is critical to limit global warming and avoid the most catastrophic impacts of climate change. Businesses must set ambitious targets to achieve net-zero emissions and take concrete actions to achieve them.
Adaptation and resilience planning is essential: Even if we achieve net-zero emissions, the impacts of climate change will persist for decades to come. Businesses must invest in adaptation and resilience measures to cope with the inevitable impacts of climate change, such as building infrastructure to withstand extreme weather events.
Collaboration is key: Achieving the required emissions reductions and building resilience will require a coordinated and collaborative effort among businesses, governments, and civil society. Businesses must work together to share best practices and collaborate with other stakeholders to achieve their goals.
What the IPCC AR6 Means for Corporate Sustainability
The findings of the report have significant implications for corporate sustainability practices and approaches. Businesses can no longer afford to ignore the impact of climate change on their operations, supply chains, and stakeholders. Here are some actions that businesses can take to play their part in mitigating the impact of climate change and transitioning to a net-zero economy:
Assess climate risks and set ambitious emissions reduction targets: Businesses must conduct comprehensive climate risk assessments to understand their exposure to physical and transition risks associated with climate change and set ambitious emissions reduction targets to achieve net-zero emissions by 2050.
Report on climate-related risks and opportunities: Businesses must report on their climate-related risks and opportunities to investors, regulators, and other stakeholders. They must provide transparent and accurate information on their emissions, energy use, and progress towards their emissions reduction targets.
Invest in climate adaptation and resilience measures: Even if businesses achieve their emissions reduction targets, they will still be exposed to the impacts of climate change. Businesses must invest in climate adaptation and resilience measures to protect their operations, supply chains, and stakeholders from the physical risks of climate change.
Collaborate with stakeholders to accelerate the transition to a net-zero economy: Businesses must collaborate with stakeholders, including governments, civil society, and other businesses, to accelerate the transition to a net-zero economy. Collaboration can help businesses to share best practices, leverage economies of scale, and influence policy decisions.
In conclusion, the IPCC Sixth Assessment Report Synthesis Report is a wake-up call for people, businesses, and governments worldwide. The report highlights the urgent need for immediate and sustained action to mitigate the worse impacts of climate change, including reducing emissions and building resilience. Businesses must prioritize and accelerate their efforts to transition to a net-zero economy and collaborate with other stakeholders to achieve a sustainable future.
“Mainstreaming effective and equitable climate action will not only reduce losses and damages for nature and people, it will also provide wider benefits. This Synthesis Report underscores the urgency of taking more ambitious action and shows that, if we act now, we can still secure a liveable sustainable future for all.” – IPCC Chair Hoesung Lee
Find the full report, the summary for policymakers, and charts and figures from the IPCC AR6 Synthesis Report here.