CODE RED: The commercial response to the climate crisis
September 9, 2021
3 min read
What's going on here?
Legal and business action is urgent now, more than ever, after a compelling report by the Intergovernmental Panel on Climate Change (IPCC) warned the world that its temperature will increase by 1.5 degrees by 2040.
What does this mean?
After the 2015 Paris Agreement, It was definitely possible to see the light at the end of the tunnel as this marked the beginning of a legitimate worldwide effort to curtail the effects of global warming to “well below 2, preferably to 1.5C, compared to pre-industrial levels”. However, the recent IPCC report from the UN urgently highlights that we are putting ourselves in an irreversible position as only two countries are on track to meet this goal (Morocco and The Gambia). According to the data in the report, if the earth does become 1.5C warmer, it is likely that “8% of plant species and 6% of insect species” will be killed off.
Although this needs to be a global effort, it is undeniable that the responsibility of climate change is unequal between actors. The Carbon Disclosure Project published a report in 2017 stating that since 1988 only 100 companies are linked to “71% of total greenhouse gas emissions”. Moreover, countries with a higher income historically emit a more disproportionate level of pollution. Despite only representing about 10% of the world’s population, Europe and America alone are said to be responsible for 23% of global emissions.
So, the buzz word here is “net zero”. If the recent alarming physical disasters to the planet were not enough, hopefully this IPCC report will shift the corporate world into gear as this becomes even more of a pressing matter. Companies and firms are being forced to take action with law firms such as Eversheds Sutherland striving to reduce carbon emissions by 2030, and reach net zero by 2050. Other firms, including those within the Magic Circle have made similar commitments regarding their energy usage.
What's the big picture effect?
The Financial Times have highlighted three main avenues of corporate impact over the next few decades:
Firstly, there’s Climate Litigation. According to a study by the London School of Economics, the total number of climate-related disputes have “more than doubled over the past five years” globally. Recently, Shell underwent this sort of battle and Total in France are expected to prepare for this form of litigation very soon. This avenue is a sure-fire way of holding big companies (especially any related to oil) responsible for their negative role in global warming.
Next, we have Methane Reduction Policies. It is likely that tighter regulation of methane and black soot emissions will begin to emerge after the IPCC report dedicated a whole chapter on pollutants. This will mainly affect certain corporate sectors such as oil companies and landfill operators.
And lastly, Carbon Removal. At some point, striving for net-zero will no longer be enough and companies will have to show the world that they are proactively engaging in practices to remove carbon dioxide from the earth’s atmosphere. Examples of this include increased investment into technology such as carbon capture and storage and more simple acts such as planting more trees.
It seems futile to talk about the corporate world amongst what seems to be an inevitable dooming apocalypse. However, there is great commercial power (and responsibility) that can actually make a difference, so it is necessary to keep the conversation going and to scrutinise corporate action on an issue that doesn’t seem to be going away any time soon.
Report written by Rida Ahmed
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