The UN Intergovernmental Panel on Climate Change’s April 2022 report explains that limiting warming to 1.5C will require global emissions to peak before 2025 and that many pathways to 2C of warming will also require this, but this will not happen under current policies. The world needs to take drastic action to maintain a stable, liveable climate.
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 nearing the end of its Sixth Assessment Cycle, during which its three Working Groups produce reports summarising the evidence base underpinning climate change. Working Group I’s report focused on the physical science of climate change, while Working Group II’s report outlined how climate change will impact society and the environment, and how the world can adapt to these impacts. This last report, Climate Change 2022: Mitigation of Climate Change, focuses on mitigating climate change by reducing greenhouse gas emissions – the central part of any organisation’s climate policy.
What does the report say?
Latest climate trends and developments
The report begins by analysing recent developments and current climate trends. It confirms that between 2010 and 2019, cumulative global emissions increased, but the rate of growth in global emissions decreased compared to the previous decade. The IPCC estimates that global cumulative greenhouse gas emissions between 2010 and 2019 were around 410 gigatonnes of carbon dioxide or equivalent greenhouse gas. To stay within the IPCC’s ‘carbon budget’ for limiting warming to 1.5C above pre-industrial levels, the world can only emit 500 gigatonnes of CO2 or equivalent greenhouse gases after 2020. In other words, the world burned through the equivalent of 80% of its remaining carbon budget in one decade. This is clearly not a sustainable pattern.
While there have been improvements in energy efficiency and the carbon intensity of energy sources, net emissions have increased across all major sectors globally, though there are still significant regional differences in contribution to greenhouse gas emissions. Both policy measures and technological advancements have avoided emissions that would have otherwise occurred, though the IPCC points to slow and uneven progress on climate finance. Working Group III also concludes that current policies do not align with nationally determined contributions (NDCs), and warming would still likely exceed 1.5C if all NDCs were implemented.
Action required to meet climate targets – three years to peak global emissions
Climate change has long-term consequences but requires immediate action. The IPCC explains that limiting warming to 1.5C will require global emissions to peak before 2025 and that many pathways to 2C of warming will also require this, but this will not happen under current policies. Furthermore, emissions must be almost halved by 2030 to stay within 1.5C, and reduced by a quarter to stay within 2C. Jim Skea, co-chair of Working Group III, asserted that limiting warming to 1.5C would be impossible “without immediate and deep emissions reductions across all sectors”. The table below summarises action required across different sectors to limit warming to 1.5C.
|Source of emissions||Actions required to limit warming to 1.5C|
|Energy||Substantial reduction in fossil fuel use, deployment of low-emission fuels, energy efficiency and conservation.|
|Industrial sector||Demand management, energy and materials efficiency, abatement technologies, introduction of low-carbon production processes.|
|Urban areas and the built environment||Reduction in energy consumption, electrification, carbon storage in urban environments, ambitious retrofitting policies.|
|Transport||Policies that reduce demand for transport services, electric vehicles, biofuels.|
|Agriculture, forestry and land use||Sustainably sourced agricultural and forestry products, focus on co-benefits and adaptation.|
In addition to the solutions outlined above, the IPCC emphasises the importance of demand-side action, including behaviour change, as well as the need for carbon dioxide removal (CDR) measures. The global economic benefit of limiting warming would likely exceed the cost of taking these mitigation measures. The report also confirms a strong link between sustainable development, mitigation of greenhouse gas emissions, and adaptation to climate change.
Ways to strengthen the global response
The IPCC outlines key policy levers and actions that will help achieve the necessary emissions reductions, emphasising that many options are feasible, scalable, and increasingly cost-effective:
- Embedding mitigation efforts within the broader development agenda can accelerate emissions reductions.
- Effective climate governance across multiple policy areas and levels of government through establishing laws, strategies, and institutions can support mitigation efforts.
- Scaling up well-designed regulatory and policy instruments including standards, investment in technology, and carbon pricing mechanisms would help cut emissions, especially when implemented in economy-wide policy packages.
- International cooperation between and within both public and private sector entities will be important for supporting and channelling climate ambition, and international financial cooperation will be vital for increasing climate finance.
What does this mean for non-executive directors?
Working Group III’s report highlights the scale of the climate challenge: the world needs to take drastic action to maintain a stable, liveable climate. Businesses need to scale up ambition to truly align with net zero, and need to be prepared to navigate vast systemic changes as 2030 draws closer. Specific mitigation efforts will vary by sector, but there are some important general messages for NEDs:
- Ensure that your business not only has long-term plans for decarbonisation, but is also prepared to make rapid reductions in emissions in line with the IPCC’s findings that emissions must fall quickly to meet climate targets.
- Capitalise on current and future trends, including the falling costs of low-carbon technologies, to give your business a competitive advantage.
- Consider how your business will be impacted by systemic changes in both government and industry. Reaching urgent global emissions reduction targets could require sharp increases in regulation that would be more costly to companies that are not prepared for these changes. Ask your board whether it has a strategy for analysing and addressing transition risk.
- Assess how different aspects of your business’ value chain, from suppliers to end-users, will be affected by mitigation efforts and identify any business risks and opportunities.
- Push your business to go further than reducing its own emissions by engaging in broader climate action. This could include funding research and development in new technologies, supporting community climate action, and partnering with relevant NGOs or public sector bodies on climate change and sustainable development.
- Climate Change 2022: Mitigation of Climate Change (including the summary for policymakers, technical summary and full report)
- IPCC February 2022: Impacts, Adaptation and Vulnerability (Climate Governance Initiative summary)
- IPCC August 2021 – The Physical Science Basis (Climate Governance Initiative summary)
- Carbon Brief’s in-depth Q&A: The IPCC’s sixth assessment on how to tackle climate change