Carbon Accounting and the IPCC Report: Why Businesses Need to Take Notice

In April 2022, the Intergovernmental Panel on Climate Change (IPCC) released its 6th report on the state of climate change, calling for “rapid and deep” emissions reductions in “all sectors” of the global economy in order to meet 1.5C or 2C of warming. The report is a stark warning, with dire predictions for the future if we don’t take action now.

Introduction

In April 2022, the Intergovernmental Panel on Climate Change (IPCC) released its 6th report on the state of climate change, calling for “rapid and deep” emissions reductions in “all sectors” of the global economy in order to meet 1.5C or 2C of warming. The report is a stark warning, with dire predictions for the future if we don’t take action now.

One of the most important takeaways from the report is that we need to factor climate change into our business decisions. This means businesses need to start tracking their carbon emissions and implementing carbon accounting practices. Carbon accounting is now more important than ever for reducing business risk.

The IPCC report and its findings

The IPCC report is a comprehensive analysis of the current state of climate science and the risks posed by climate change. The report warns that if greenhouse gas emissions continue to rise at their present rate, the Earth will reach a point of no return by 2025 to 2030 and it will be “impossible” to stay below 1.5C with “no or limited overshoot” without stronger climate action this decade. The “point of no return” is characterized as a time when the Earth will have warmed by 1.5 degrees Celsius, triggering widespread and cascading climate impacts.

The report also makes clear that the private sector will need to play a key role in reducing emissions. The current level of greenhouse gas emissions is already putting businesses and assets at risk from climate change. In order to avoid these risks, businesses need to begin carbon accounting and taking steps to reduce their emissions to reach net zero – an ambitious goal that requires all companies to account for and disclose their carbon emissions.

What is carbon reporting?

Carbon reporting is the systematic measurement and disclosure of a company’s greenhouse gas emissions. It’s an important part of corporate sustainability and helps companies identify opportunities to reduce their emissions and ultimately mitigate climate change. Carbon reporting also helps to assess a company’s progress in relation to their climate change goals and can be used as a tool to benchmark and compare performance with peers.

How businesses are affected by the IPCC report

The key findings of the IPCC report have business ramifications that cannot be ignored, as well as the physical risk to business, due to the non-linear impact of climate change. For businesses, this means taking a closer look at their carbon footprint and starting to plan for a low-carbon future.

It also means being prepared for the increased regulation and disclosure that will follow in the next few years. Reporting carbon emissions can add to a business’s transparency and accountability. It can also help businesses identify opportunities for cost savings and efficiency improvements.

Another major risk is to business reputations. As consumer awareness of climate change grows, businesses that are seen as not taking the issue seriously will face an increased risk of consumer boycotts. Finally, businesses need to be aware of the implications of the report for their bottom line.

Asset managers and Boards need to be aware of these risks and start planning for them now. Ignoring the IPCC report is not an option, and businesses need to start paying attention if they want to stay ahead of the curve.

The risks of not taking action on climate change

Businesses that ignore the IPCC report do so at their own peril. Climate change is already costing businesses billions of dollars in damages, and that number is only going to increase to trillions in just a few years. But for businesses, this isn’t just an issue of ethics—it’s also an issue of financial security. The risks of not taking climate change into account are serious and could lead to a loss in market share, damage to branding, supply chain disruption, regulatory non-compliance, and even bankruptcy.

Not only that, but customers are increasingly interested in sustainable practices. In fact, a recent study showed that 73 percent of consumers would be willing to pay more for products from companies that are committed to reducing their carbon footprint. That’s a lot of potential lost market share.

What are the challenges of carbon reporting?

Despite the growing popularity of carbon management and carbon reporting, there are still a number of challenges that organizations face. The main barrier is often a lack of understanding or awareness of carbon, including data tracking and verification, and accessing accurate and up-to-date information. Other barriers include a lack of resources, such as qualified personnel or data, and the cost of implementing systems and measuring emissions. There is also often a lack of standardization in data collection and reporting, which can make it difficult to compare emissions from different organizations.

Businesses can start however preparing for climate change by implementing carbon accounting measures, which will help them to identify and quantify their emissions. This in turn will allow businesses to develop mitigation strategies and reduce their exposure to risk. Luckily, there are a number of tools and resources available to help make this process easier.

At Carbon Clarity, we have the expertise to help your business get started and we’re committed to helping businesses take climate action and create a more sustainable future.

The IPCC report and its findings

The IPCC report is a comprehensive analysis of the current state of climate science and the risks posed by climate change. The report warns that if greenhouse gas emissions continue to rise at their present rate, the Earth will reach a point of no return by 2025 to 2030 and it will be “impossible” to stay below 1.5C with “no or limited overshoot” without stronger climate action this decade. The “point of no return” is characterized as a time when the Earth will have warmed by 1.5 degrees Celsius, triggering widespread and cascading climate impacts.

The report also makes clear that the private sector will need to play a key role in reducing emissions. The current level of greenhouse gas emissions is already putting businesses and assets at risk from climate change. In order to avoid these risks, businesses need to begin carbon accounting and taking steps to reduce their emissions to reach net zero – an ambitious goal that requires all companies to account for and disclose their carbon emissions.

What is carbon reporting?

Carbon reporting is the systematic measurement and disclosure of a company’s greenhouse gas emissions. It’s an important part of corporate sustainability and helps companies identify opportunities to reduce their emissions and ultimately mitigate climate change. Carbon reporting also helps to assess a company’s progress in relation to their climate change goals and can be used as a tool to benchmark and compare performance with peers.

How businesses are affected by the IPCC report

The key findings of the IPCC report have business ramifications that cannot be ignored, as well as the physical risk to business, due to the non-linear impact of climate change. For businesses, this means taking a closer look at their carbon footprint and starting to plan for a low-carbon future.

It also means being prepared for the increased regulation and disclosure that will follow in the next few years. Reporting carbon emissions can add to a business’s transparency and accountability. It can also help businesses identify opportunities for cost savings and efficiency improvements.

Another major risk is to business reputations. As consumer awareness of climate change grows, businesses that are seen as not taking the issue seriously will face an increased risk of consumer boycotts. Finally, businesses need to be aware of the implications of the report for their bottom line.

Asset managers and Boards need to be aware of these risks and start planning for them now. Ignoring the IPCC report is not an option, and businesses need to start paying attention if they want to stay ahead of the curve.

The risks of not taking action on climate change

Businesses that ignore the IPCC report do so at their own peril. Climate change is already costing businesses billions of dollars in damages, and that number is only going to increase to trillions in just a few years. But for businesses, this isn’t just an issue of ethics—it’s also an issue of financial security. The risks of not taking climate change into account are serious and could lead to a loss in market share, damage to branding, supply chain disruption, regulatory non-compliance, and even bankruptcy.

Not only that, but customers are increasingly interested in sustainable practices. In fact, a recent study showed that 73 percent of consumers would be willing to pay more for products from companies that are committed to reducing their carbon footprint. That’s a lot of potential lost market share.

What are the challenges of carbon reporting?

Despite the growing popularity of carbon management and carbon reporting, there are still a number of challenges that organizations face. The main barrier is often a lack of understanding or awareness of carbon, including data tracking and verification, and accessing accurate and up-to-date information. Other barriers include a lack of resources, such as qualified personnel or data, and the cost of implementing systems and measuring emissions. There is also often a lack of standardization in data collection and reporting, which can make it difficult to compare emissions from different organizations.

Businesses can start however preparing for climate change by implementing carbon accounting measures, which will help them to identify and quantify their emissions. This in turn will allow businesses to develop mitigation strategies and reduce their exposure to risk. Luckily, there are a number of tools and resources available to help make this process easier.

At Carbon Clarity, we have the expertise to help your business get started and we’re committed to helping businesses take climate action and create a more sustainable future.

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