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What the IPCC report means for corporate boards

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Unfortunately, the Intergovernmental Panel on Climate Change’s latest report makes it completely clear that this will not be considered an unusual year when it comes to floods, fires, drought and all the other natural catastrophes. It is the new normal. Perhaps 2021 will go down in history as one of the better years.

The IPCC releases its "State of the Climate" every seventh year. In 2013, the so-called fifth assessment report painted a dark picture of our future if we were to continue down the same track. It basically said, "Pay now, or pay with interest in the future." And while the interest rates for lending money are at an all-time low, the interest rate from Mother Earth is at an all-time high and headed higher.

We need climate-competent boards to demand and oversee that companies will keep their commitment to a net-zero future.

Here are a few "Possible Climate Futures" as suggested in the report’s Summary for Policymakers:

  1. Global surface temperature will continue to increase until at least the mid-century under all emissions scenarios considered. Global warming of 1.5 degrees Celsius and 2 degrees C will be exceeded during the 21st century unless deep reductions in carbon dioxide (CO2) and other greenhouse gas emissions occur in the coming decades.
  2. Many changes in the climate system become larger in direct relation to increasing global warming. They include increases in the frequency and intensity of hot extremes, marine heatwaves and heavy precipitation, agricultural and ecological droughts in some regions; higher proportions of intense tropical cyclones; as well as reductions in Arctic sea ice, snow cover and permafrost.
  3. Continued global warming is projected to further intensify the global water cycle, including its variability, global monsoon precipitation and the severity of wet and dry events.
  4. Under scenarios with increasing CO2 emissions, the ocean and land carbon sinks are projected to be less effective at slowing the accumulation of CO2 in the atmosphere.
  5. Many changes due to past and future greenhouse gas emissions are irreversible for centuries to millennia, especially changes in the ocean, ice sheets and global sea level.

Under the headline "Limiting Future Climate Change," it is made clear that "From a physical science perspective, limiting human-induced global warming to a specific level requires limiting cumulative CO2 emissions, reaching at least net-zero [carbon dioxide] emissions along with strong reductions in other greenhouse gas emissions. Strong, rapid and sustained reductions in [methane] emissions would also limit the warming effect resulting from declining aerosol pollution and would improve air quality."

Implications for board members

The IPCC report is intended for policymakers and released ahead of the COP26, taking place later this year, where policymakers are to negotiate climate policies.

However, as the report makes crystal clear, we don’t have any time to waste, we can only blame ourselves for the dire situation we are in, and it is our responsibility not to wait for governmental policies, but to act.

Many companies, and therefore their board of directors, have more influence and power to enforce decisions than many governments. I call upon those board members to act now.

Here are the five action points to which I would like to see boards commit:

  • Read the IPCC report. The summary is only 42 pages long — you can find it here.
  • Discuss the report at the next board meeting — if not an extraordinary board meeting — as this is an extraordinary threat to your company, your employees, your suppliers, your customers and your and all your stakeholders’ families.
  • Determine if the company is part of the problem or part of the solution and reach out to the policymakers to let them know that you are willing to work with them to achieve a net-zero economy.
  • Release a statement, signed by the CEO and board members, confirming that all have read and discussed the IPCC 2021 report — and if/how the report has caused the leadership to want to change any strategic plans and priorities.
  • Ensure that leaders, including board members, are "climate competent." Many global leaders have come together to offer the Climate Competent Boards Certificate program that Saïd Business School University of Oxford, Thunderbird School of Global Management and Arizona State University's Julie Ann Wrigley Global Futures Laboratory along with Competent Boards is offering. More information here.

As I wrote in my previous column, I would also like to see more commitments to science-based targets, transition plans backed by budgets and clear climate governance by climate-competent board members.

We put a man on the moon; now we need to keep humankind on earth. And to do that we need intelligence, investment and an innovative mindset. We need climate-competent boards to demand and oversee that companies will keep their commitment to a net-zero future.

The lives of your children are in your hands.

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