James Beresford, Senior Director, CISL (University of Cambridge Programme for Sustainability Leadership), Aris Vrettos, Director of BSP (Business and Sustainability Programme) at CISL, and Marina Grossi, President of CEBDS. CISL and CEBDS bring the second BSP course back to Brazil from November 24 to 27 in São Paulo.
Changes on planet Earth: are the transformations so big, complex and imperceptible that we can consider them?
On May 12, 2014, NASA researchers published evidence that parts of the West Antarctic Ice Sheet are melting rapidly and have passed the “point of no return.” The inexorable melting of these vast glaciers will take time, but they contain enough ice to eventually raise sea levels by 1.2 meters. On September 9, the World Meteorological Organization (WMO) reported that oceans are acidifying at a rate not seen in 300 million years. On the same day, the organization announced that 2013 had seen the largest increase in CO2 in the atmosphere of the last 30 years.
What can we conclude from this evidence? Depending on your perspective, these signs may spark passing interest, or you may find them highly disturbing.
For most of us, these developments have little relevance to the concerns and pressures of everyday life. And yet it is the cumulative impact of what we do in our daily lives that has brought us to a stage where humans are the dominant force shaping the natural environment – a new geological era that scientists call the “Anthropocene”. Our collective influence on natural processes extends beyond the climate system to impact other systems, such as hydrological and nutrient cycles. Entering the Anthropocene means that our economic activity has dramatic consequences. It has become a cliché to say that we live in an increasingly interconnected world, but one thing is indisputable: our economies and societies are now intimately linked to the global environment. Given this complexity, how do you define your vision for how the future might unfold?
Dialoguing with science to build your vision
The Intergovernmental Panel on Climate Change (IPCC), an international body that brings together thousands of scientists who work with and have access to the latest scientific information and present the results of their research to governments, recently released a summary of its fifth report. Compiling the physical science behind climate change, it concludes that climate change is indisputable and that human activities, particularly carbon dioxide emissions, are most likely the dominant cause. If emissions continue to increase at the current rate, by the end of the century we will have average temperatures 2.6–4.8 degrees Celsius (°C) higher than today, and sea levels 0.45–0.82 meters higher than they currently are.
The latest IPCC report is not a pleasant read and its conclusions can be difficult to accept. These findings have a high degree of scientific confidence. It is worth pausing to reflect on how remarkable the level of consensus is. Science is, by nature, permeated by opposing viewpoints – its evolution is based on a continuous process of conjecture and refutation – so when the vast majority of scientists at the forefront are of the same opinion, there really must be concrete evidence. It is safe to conclude that following the same path – blindly or passively – will lead to unprecedented changes in the human habitat.
Of course, action is being taken. To prevent the most devastating impacts of climate change, governments have agreed to limit the increase in global average temperature to a maximum of 2O Above pre-industrial levels.
However, even if we could stop emissions immediately – enough CO2 has already been emitted into the atmosphere and new fossil fuel-using infrastructure has already been planned – that temperatures will continue to rise.
Inevitably, companies must prepare for a more turbulent future – adapting to new climate extremes (as can be seen in these climate reports for 2050), new policies, new consumer preferences and changing public opinion. Efforts are underway to help companies better understand this. For example, a project called Action 2020 proposes a roadmap for companies to positively influence environmental and social trends while strengthening their own resilience to address issues such as climate change, demographic dynamics and skills shortages.
Can science help build business scenarios? A series of brief infographics from the University of Cambridge, drawn from the IPCC report, aims to guide decision-makers towards key issues in their sectors. Produced by CISL (Cambridge Institute for Sustainability Leadership), Cambridge Judge Business School and European Climate Foundation, these summaries condense the main conclusions of the IPCC report into objective and sector-specific summaries, considering 11 sectors. Below is an example of the infographic “Climate Change: Implications for Cities”.
Cities concentrate impacts, risks and investment opportunities
The majority of the world’s population now lives in cities (53% in 2013). Many emerging risks from climate change are concentrated in urban areas, due to the concentration of population, built developments and economic activities. The impacts of climate change on cities are increasing in severity. Rising temperatures causing heat stress and health problems, loss of water resources, rising sea levels and storm surges affecting coastal cities, extreme weather events such as floods and droughts, and risks to food security.
Exposure to these risks will increase as the global urban population is expected to double in size by 2050. Almost all of the growth will occur in less developed regions, where the current population of 5.3 billion in developing countries is expected to reach 7.8 billion by 2050. Rapid urbanization in low- and middle-income countries has already increased the number of vulnerable urban communities living in informal housing, many of which are at high risk of extreme weather events. This is exactly what we have seen in the drought situation in São Paulo and its implications for Brazilian society and the economy. Today, around 150 million people live in cities with water scarcity, and this number is expected to reach up to 1 billion people by 2050, according to some scenarios. Coastal cities – particularly those with large ports, petrochemical and energy facilities – are particularly vulnerable to sea level rise and storm surges. The value of assets exposed to such flood risk in 2050 has been estimated at US$1.4 trillion or around 51.3 trillion of global GDP. Over the next 60 years, this value is projected to reach 91.3 trillion of global GDP.
These same rapidly urbanizing areas that are at risk offer the greatest opportunities for sound investment in mitigation and adaptation. Building low-carbon infrastructure that is resilient to climate disruptions and enabling sustainable development in urban areas can accelerate the success of global climate adaptation. In practice, this will occur through significant investment in buildings, energy, transportation, and new industries. For example, cities with dynamic growth offer the greatest opportunity to reduce emissions from energy use, as greenhouse gas emissions can be virtually eliminated for new construction. Retrofitting existing buildings can also achieve dramatic emissions reductions and substantial energy savings. One estimate suggests that central heating needs could be reduced by 50 to 90 TP3T annually in condominiums at a cost of 100 to 400 TP4T per square meter.
Be prepared
It is often stressed that avoiding a climate crisis and its implications is not beyond our ability and that companies can generate significant cost savings and innovation opportunities – if they can develop a good strategy in time. The reality is that given the current situation and trajectory, we can expect that There will be – and already are – winners and losers in the race towards a low-carbon, climate-resilient economy.
While many companies have developed sustainability goals and metrics, few have a low-carbon vision. Many industries will require transformative change to adapt and survive, let alone remain competitive. For example, the European service industry is already experiencing major disruption as science forces decision-makers to create incentives for renewable energy, which once markets and consumers adapt, will ultimately disrupt current business models for electricity generation.
In this context, the only viable strategy is to use science to reinforce the level of preparation and response. By understanding where and how multifaceted impacts affect decisions within the business operational context, business and sustainability leaders can anticipate risks, market and policy trends, adopt new strategies and test business models that will thrive in a warming world trying to move towards a low-carbon trajectory.
