Regulations & Resources
What the IPCC report on climate change impacts means for investors
Further delay in driving greenhouse gas emissions to net-zero would undermine the ability of nature and society to adapt to the perils of a warming planet and dim prospects for a livable future, the latest report from the Intergovernmental Panel on Climate Change (IPCC) warns.
- What the IPCC report on climate change impacts means for investors
- Key provisions of the COP26 climate agreement
- COP26 week one recap
- COP26 national climate commitments tracker
- Keeping warming to 1.5°C will require big countries to quit coal
- What the latest IPCC report means for investors
- About the COP26 climate summit
- What is the role of emissions trading?
- Climate-related regulations for the financial sector
- The significance of nationally determined contributions
- Financial industry climate alliances and initiatives
- Climate reporting by capital-markets participants
- A glossary for getting to net-zero
Failure to limit global temperature rise this century to 1.5°C by cutting emissions by half this decade and to net-zero in the two that follow would exacerbate changes in weather and other physical effects of warming that have impacted the planet irreversibly already, according to the report, which presents the latest scientific consensus on the interconnections among climate change, biodiversity and human well-being.
The increase in global temperatures caused by putting carbon dioxide into the atmosphere weakens natural systems that reduce climate risk and increase the resiliency of society to adapt, according to the report, which emphasizes that the capacity of nature to mitigate climate change risk hinges on humanity’s ability to quickly reduce CO2 emissions and conserve Earth’s land, freshwater and ocean areas, it finds.
“We are in an emergency headed for a disaster,” said Inger Andersen, executive director of the UN Environment Programme. “Even if we limit global warming to 1.5°C , the blows will come harder and faster.”
“We can’t keep taking these hits and treating the wounds,” she added. “Soon those wounds will be too deep and too catastrophic to heal. We need to soften and slow the blows by cutting greenhouse gas emissions. But we also need to cushion the blows by picking up our efforts to adapt to climate change.”
The IPCC report, which reflects the work of 270 scientists from 67 countries, finds that the impacts and risks of climate change are becoming increasingly complex and difficult to manage. The report identifies 127 risks between now and 2040 to a range of sectors that span health, the economy, agriculture and ecosystems. The magnitude of such risks, which imminently threaten about 40% of the world’s population, depends strongly on society’s ability to reduce greenhouse gas emissions and adapt in the near term, it says.
The imperative to cut emissions
The report, the second in a series of three reports to be published by the IPCC as part of its so-called sixth assessment cycle, underscores the need to accelerate efforts to rein in emissions and scale investment in sustainability. The first, which examined the physical science basis for climate change, found that Earth’s temperature has already increased by about 1.1°C from preindustrial levels as a result of human-caused emissions.
“Coal and other fossil fuels are choking humanity,” said António Guterres, the UN secretary general, who called the latest report “an atlas of human suffering and an indictment of failed climate leadership.”
“Governments must dismantle their coal fleets, he added. “Those in the private sector still financing coal must be held to account. You cannot claim to be green while your plans and projects undermine net-zero targets.”
At the same time, the report notes that while initiatives to adapt to the effects of climate change are underway in every region, gaps remain between actions taken and those needed, particularly in developing economies, where vulnerability to the effects of climate change remains highest and where financial flows for adaptation remain lowest.
Scaling up investment in adaptation, together with efforts to eliminate the unsustain able use of natural resources, can also help people who live in regions whose location renders them climate change hotspots by securing drinking water and improving the resiliency of both agriculture and food systems, the report finds.
The growth of cities, which are projected to house roughly two-thirds of the world’s population by 2050, offers opportunities to reinforce the resilience of urban infrastructure by increasing tree cover, using nature-based approaches to engineering, and improving the social safety net for disasters that, taken together, can protect communities from rising sea levels and help people withstand heat stress
Still, the report notes the limits of adaptation as temperatures rise. “We know that adaptation cannot prevent all losses and damages, and even with effective adaption, limits will be reached with higher levels of warming,” said Debra Roberts, co-chair of the IPCC working group that wrote the report. “Some natural solutions will no longer work above 1.5°C of warming. And by 2°C, it may be especially challenging to find multiple staple crops in many current growing areas, particularly in tropical regions.”
In addition to rapidly reducing greenhouse gas emissions, the report recommends that governments, investors, businesses and organizations across society work in concert toward development that prioritizes the resiliency of biodiversity and ecosystems, which play a critical role in both reducing climate risk and boosting society’s resiliency to its effects.
Climate Change 2022: Impacts, Adaptation and Vulnerability. Link to the IPCC Working Group II Sixth Assessment report together with a summary for policymakers and technical summary.
No Planet B: Financing Climate Adaptation. A report by MSCI ESG Research that examines the need for investment in climate adaptation, including projects that can help drive large-scale expansion of sustainability in countries most at risk from climate change.
Coffee vs. Burgers? Biodiversity and The Future of Food. MSCI ESG Research examines the interdependency between natural systems and food production, and the reshaping of the agricultural and food industries underway amid a loss in biodiversity.
Will Rising Sea Levels Sink Christmas? MSCI ESG Research examines the risk from rising sea levels to global manufacturing hubs located in coastal provinces of China.