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What does the IPCC report mean for business and investors?

Dried Riverbed in France

The IPCC report has stated a 95% certainty that human activity is responsible for climate change and predicts that temperatures will continue to rise. Photograph: Stephane Mahe/ STEPHANE MAHE/Reuters/Corbis


Powered by article titled “What does the IPCC report mean for business and investors?” was written by Laura Paddison, for on Friday 27th September 2013 17.32 UTC

The publication of the Intergovernmental Panel on Climate Change’s report, a rigorous scientific assessment of the facts and figures on climate change, is providing fuel to both climate change believers and sceptics.

The report, which is the first major assessment by the IPCC in six years, has serious credentials. Drawing on the papers of over 800 scientists, it was compiled over a period of six years through the IPCC, which itself has been convened by more than 190 governments.

The warnings are stark. The report’s conclusions include a 95% certainty that climate change is caused by human activity and an analysis that global warming is likely to skip past the two degrees rise beyond which lies dangerous damage to the environment. There are also predictions of sea level rises and statistics that show concentrations of greenhouse gases are the highest they’ve been in the last 800,000 years.

And while climate change sceptics have seized on the reference to a slowing down in the temperature rises over the past 15 years. IPCC scientists maintain that the longer term trends show successive warming.

Rajendra Pachauri, chair of the IPCC, has said it is time for the governments to take action now. But what about the private sector? What do the warnings mean for business and investors? And what can they do to tackle the risks posed by climate change?

We asked experts to give their views. We would love it if you can add your comments below to broaden to the debate.

Nick Robins – head of HSBC Climate Change Centre of Excellence

For governments, businesses and investors to take action to create a prosperous low carbon economy, they need the facts. And now we have them, in the form of the first volume of the IPCC report.

We now have greater levels of confidence that the global economy is responsible for the warming the world is experiencing – and we know that each decade’s average temperatures continue to rise. We also know, thanks to the new report, that the observed impacts of the limited warming we have experienced to date are faster and deeper than previously expected. These impacts are already being experienced by key economies, and HSBC’s latest research identifies India, China, Indonesia, South Africa and Brazil as the five G20 nations most vulnerable to the impacts of climate change. Together, they represent 31% of projected global GDP in 2050.

Over the following year, we believe that – from the next reports – the IPCC will provide stronger foundations for climate action by governments, businesses and investors, culminating in the deadline for negotiations in December 2015. Looking back, climate policies surged on the back of the 2006 Stern Report and the last IPCC review in 2007. But the rate of new policies then slowed significantly, in part due to a shift towards implementation and, in part, in response to the global financial crisis. But the economic outlook has improved since then, the costs of clean tech solutions have fallen and the multiple health, resource and innovation benefits of the low-carbon transition are becoming clearer, not least in China.

Many business and investor strategies to respond to climate change are based on the last generation of science. Now’s the chance to dust off the underlying assumptions and revitalise these commitments, so that long-term value is delivered through a clearheaded approach to the reality of climate risk.

Paul Simpson – CEO of CDP

Paul Simpson

Photograph: CDP

The launch of the IPCC report continues the trend of strengthening climate change science that we have seen since the first assessment report in 1990. It ends the debate about whether climate change is real and caused by human activity.

The report will certainly not shock the market. Disclosures to CDP show that 84% of the world’s largest companies already see the risks that climate change regulation presents to their business, while 83% identify risks as a result of a changing climate. Such risks include regulation that may strand assets which become unprofitable due to carbon restrictions or business disruption as extreme weather becomes more frequent and severe.


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