The IPCC Climate Change 2023: Synthesis Report is a ‘final warning’ that radical action must be taken by governments and businesses.
The scientific evidence is clear: the planet is at a major inflection point when it comes to climate change, Luiz Amaral, CEO of the Science Based Targets initiative (SBTi) said. “The Intergovernmental Panel on Climate Change (IPCC) Climate Change 2023: Synthesis Report has given its ‘final warning’ that immediate and radical action must be taken by governments and businesses to tackle climate change. Global heating has already caused dangerous disruptions for nature, human livelihoods, businesses and economies across all regions.”
According to the IPCC, limiting global warming to 1.5°C requires emissions to peak before 2025, reduce emissions by 43 per cent by 2030 and reach net-zero in early 2050. In short, the next seven years are critical to preventing climate breakdown and immediate emissions reductions across all regions and sectors are essential.
“Companies and financial institutions have enormous potential to make a difference as the world faces this challenge, and it is by cutting carbon emissions in line with science that they can realise the greatest impact,” Amaral continued. “Businesses need to be taking faster and bolder steps to reduce their emissions than ever before. The pathways for businesses to cut their emissions in line with science are known, so there is no excuse for inaction.
“Setting science-based targets is a proven way for businesses to make meaningful change, and now it needs to become standard for every organisation. Companies with validated science-based targets have already demonstrated that monumental reductions are possible – cutting scope 1 and 2 emissions by 12 per cent on average year on year – greater than the 7.6 per cent year on year reductions required to achieve the Paris Agreement’s 1.5°C target.
“If science-based action is fully scaled up across the global economy, a 1.5°C global economy is also possible. However, the urgency of the climate crisis means that every business must take action today and join the 2,500 companies and financial institutions that already have validated science-based targets.”
The SBTi Net-Zero Standard plays a key role in enabling companies to meet the emissions deadlines as set out by IPCC. “Our sector-specific standards provide companies in high-emitting industries with additional and complementary guidance to help them through the target-setting process,” Amaral says. “These take into consideration each sector’s particular barriers and opportunities, so targets are achievable while still being rooted in science. The knowledge and tools are at their fingertips, so all businesses must set credible and science-based climate targets.”
By choosing to set science-based targets, businesses can lead the world’s decarbonisation journey, but to realise the scale of change that is needed to prevent climate catastrophe, collaboration across businesses, governments, cities and civil society will also be key. Ultimately, we need to ensure setting science-based targets becomes ‘business as usual’ for companies and financial institutions worldwide, and policy change will be the most effective way to ensure this uptake of science-based targets is scaled at speed. Calls for legislative change from companies, organisations like the SBTi, other not-for-profits and the research community will be critical in driving this forward.
We must also address the elephant in the room: fossil fuels. The combustion of fossil fuels represents the single largest source of carbon dioxide emissions, so it is imperative that this sector also embraces decarbonisation and everything that this means for their businesses. The world must end its dependence on fossil fuels otherwise it will be impossible to limit global warming to 1.5°C, regardless of any other collective action. That’s why we are working on a new methodology to help companies in this sector to set science-based targets and transform to meet the goals of the Paris Agreement. But again, bold policy is also needed in parallel, particularly to ensure that investment and subsidies are diverted into renewable energies and clean innovation.
Additionally, the enormity of the challenge we face means companies must increasingly be focused on societal net- zero. This means companies need to be focused on cutting their own emissions first, but then also investing in climate finance beyond their own value chains. This beyond value chain mitigation need not be limited to carbon removals. Companies should work to enhance carbon sinks and invest in emerging greenhouse gas removal technologies, but also support reductions in emissions, ending deforestation and protecting other vital habitats. Some first movers have made progress in this area but, overall, uptake has been slow. The SBTi is developing guidance in this area that will be launched later in 2023 to further unlock investments in these crucial activities.
“The clock is ticking and we are running out of time,” Amaral concluded. “In the absence of strong international legislation, we also need businesses to continue stepping up to the challenge of decarbonisation and taking the lead.
“We must follow science. There is still time – and an urgent need – for the private sector to make a difference. Set a science-based target for your organisation and deliver transformational change today.”