Business Implications of IPCC AR6 WG1

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The Intergovernmental Panel on Climate Change’s (IPCC) Working Group Report 1 Sixth Assessment Report (WG1 AR6) has made it unequivocally clear that humans are the leading cause of the unprecedented warming of the atmosphere, ocean and land. Global surface temperatures have already increased by 1.07 °C than preindustrial times (1850-1900) bringing us even closer to the 1.5 °C threshold, when scientists predict irreversible tipping points, such as ocean warming, Greenland glacial melting, and sea level rise, will be crossed. Given the findings of WG1 AR6, irreversible changes to our climate system are already happening and will continue to accelerate. 

All scenarios outlined by WG1 AR6 project that global surface temperatures will cross the 1.5 °C threshold by 2040-2060, putting humanity on a path of 1.6 °C at best and as much as 2.4 °C under a business-as-usual (BAU) scenario. The climate impacts we are witnessing today are the result of only 1.07 °C warming. 

Global surface temperature change relative to 1850-1900 graph from IPCC AR6 WG1 Summary for Policymakers.

 

As global surface temperature continues to rise, so does the extent of the changes in the climate system. This equates to more frequent and more intense extreme events such as hot extremes, marine heat waves and heavy precipitation, agricultural droughts, and sea ice and snow cover reductions.

Climate Projections in WG1 AR6 and Philippine Businesses

The Philippines consistently ranks among the most affected by extreme weather events linked to climate change. Its geographic location, as well as archipelagic structure exposes the country to an average of 20 tropical cyclones annually, about half of which hit land. The country is highly vulnerable to climate-related natural hazards such as storm surges, floods and landslides. To compound matters, about 60% of the country’s population are found along coastlines exposing them to slow onset impacts such as sea level rise. (You may find more information on the implications to the Philippines here)

Not surprisingly, Philippine businesses are already suffering from the physical, and to a lesser extent (for now), the transitional risks of climate change. What has become increasingly clear is that climate change is no longer a peripheral risk treated with varying materiality but rather an uncertain terrain that businesses must align their strategies to. With climate change impacts expected to intensify, enterprise risk management, as well as strategic planning processes must be viewed through a climate lens and incorporate longer time horizons. 

The good news is that there is a growing wealth of information and tools available for businesses to make more climate-informed decisions. The WG1 AR6 provides a logical starting point for businesses to plan for a whole range of different scenarios and their accompanying possibilities. To contextualize the impacts of climate change in the Philippines, the OML Center produces a number of publications that elucidates climate risk information to support climate-resilient decision making (see list below). 

The OML Center together with the First Philippine Holdings Corporation (FPH) conducted an initial study to understand the physical risks of climate change to select industries in the Philippines. It identified risks and hazards that have potential impact to business such as sea level rise, reduced rainfall for some regions, and extreme events, among others. Download a copy here.

Building Climate Resilience

The runway to the 2030 goal post is shrinking, the year in which many global developmental commitments are due. The actions we take in the next eight to ten years will be definitive in shaping the world for businesses and the stakeholders who depend on them. But understanding the physical risks brought about by climate change and responding to them will not be enough. The WG1 AR6 has underscored the different futures we face between a 1.5 °C and 2 °C world. It is therefore imperative that we not only brace for impact but make deep and rapid cuts to our carbon-intensive economies towards a decarbonized world. 

A climate changed world is a perilous one. To avoid the accelerated degradation of the environment due to climate change, it is important to address the root cause of the problem—in this case, the carbon emissions. Each one of us and all sectors of our society must either reduce carbon emissions or remove carbon emissions from the atmosphere. The first step of decarbonization is awareness. Individuals and organizations must measure their carbon footprints for reference. A people’s initiative named AKO ANG BUKAS provides a localized carbon calculator for individuals and organizations, including businesses, as part of its efforts to involve all sectors nationwide in taking urgent, concerted action to address the climate crisis. The calculator helps assess which among individual regular activities, or in the case of businesses where in the value chain, has the highest potential for carbon avoidance and reduction. There is a hierarchy of actions that can be done: 

a) avoid carbon intensive activities, b)  shift to low carbon technologies like renewable energy or low carbon fuel from gasoline to biofuel, and c) participate in restoring or reforesting open areas as plants use carbon to produce their food.

While the risks and impacts of climate change seem insurmountable as it looms over us, it also offers us opportunities to transform the paradigm we are living in and shift it towards one that is regenerative, in that it heals our relationship with all aspects of nature and the planet. We have to come to terms with the notion that life, as we know it, is no longer a viable option going forward.  Building back and going back to a system that has shown us our/its failures should not be difficult to comprehend.  Not only does this make business sense into the future but also provides a pathway for a more just and inclusive economy for future Filipinos.

The IPCC’s Sixth Assessment Report (AR6) comprises three Working Group contributions: Working Group 1 (the physical science basis), Working Group 2 (impacts, adaptation and vulnerability), and Working Group 3 (mitigation), a Synthesis Report, three Special Reports, and a refinement to its latest Methodology Report. The Synthesis Report will be the last of the AR6 products, currently due for release in 2022. 

The First Philippine Holdings Corporation (FPH) is a Philippine-based conglomerate with principal interests in clean and renewable energy, premium real estate, manufacturing, construction, healthcare and education.

The following knowledge products from the OML Center are available for download via our website:

State of the Philippine Climate (SPC)

In partnership with PAGASA, the Center produces this series which provides a summary of observations of the country’s climate and climate-related disasters on an annual basis.

Editions of the SPC are available for download here.

Philippine Climate Change Assessment Reports (PhilCCA)

With the Climate Change Commission (CCC), the Center publishes the PhilCCA Reports, which contain comprehensive information on climate change science in the Philippines. The PhilCCA has three volumes, namely Working Group 1: The Physical Science Basis, Working Group 2: Impacts, Adaptation and Vulnerability, and Working Group 3: Mitigation of Climate Change.

The reports are available for download via the PhilCCA page on our website

PhilCCA Sectoral Snapshots

Sectoral Snapshots highlighting climate vulnerabilities of Philippine forests and the public health sector were also developed to serve as quick visual reference guides for science-based planning and decision-making. 

The Sectoral Snapshots can be downloaded via the PhilCCA page on our website.

The Philippine Climate Almanac

The first of its kind in the country, the Philippine Climate Almanac highlights record-breaking and other significant statistics of climate-related variables, extreme events, and disasters across seven decades through data visualizations designed to appeal to  audiences outside the scientific and academic communities.

The Philippine Climate Almanac is available for download here.