The Intergovernmental Panel on Climate Change (IPCC) recently released their sixth Assessment Report (AR6): the IPCC 2023 Climate Report. It brings together the latest research on climate change. As SMEs constitute a significant part of the global economy, it is crucial for these businesses to understand and adapt to the consequences of climate change. In this blog post, we will explore the key takeaways from the report and their implications for your business.
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1. Climate change is accelerating
The study highlights the stark reality that climate change is happening at a faster pace than previously anticipated. Global warming has reached 1.1°C above pre-industrial levels, and under current scenarios, it could reach the critical threshold of 1.5°C between 2025 and 2035. This acceleration is driven by human activities, primarily the burning of fossil fuels and deforestation.
Takeaway for SMEs: SMEs must take decisive action to reduce their carbon footprint by adopting energy-efficient technologies, shifting to renewable energy sources, and implementing sustainable business practices. You can start by calculating your company's carbon footprint, after which you could reduce and potentially compensate for it.
2. Extreme weather events are becoming more frequent and severe
Additionally, the panel confirms that extreme weather events, such as heatwaves, heavy precipitation, droughts, and tropical cyclones, are becoming more frequent and severe due to climate change. These events can cause significant disruptions to SME operations, supply chains, and infrastructure. Aditi Mukherji, one of the authors: “Almost half of the world’s population lives in regions that are highly vulnerable to climate change. In the last decade, deaths from floods, droughts and storms were 15 times higher in highly vulnerable regions".
Takeaway for SMEs: SMEs should develop comprehensive risk management strategies, including supply chain diversification and investing in resilient infrastructure, to minimise the impacts of extreme weather events on their business.
3. Ecosystems and biodiversity are under threat
Thirdly, the AR6 reveals that climate change is putting unprecedented pressure on ecosystems and biodiversity. The loss of natural habitats and species will have far-reaching consequences for the global economy, as these resources play a vital role in providing essential goods and services. Climate, nature, and people are all linked. To keep our planet healthy, we need to protect about 30-50% of Earth's land, water, and seas in a fair way. Cities can play a big role in fighting climate change and promoting sustainable development.
Takeaway for SMEs: SMEs should take steps to minimise their impact on the environment and adopt sustainable sourcing practices. By protecting ecosystems and supporting biodiversity, SMEs can contribute to long-term environmental and economic stability.
4. Achieving net-zero emissions is crucial
The paper also underscores the importance of achieving net-zero emissions by mid-century to limit global warming to 1.5°C. To reach this target, global CO2 emissions must decline by about 45% by 2030, and reach net zero by around 2050.Takeaway for SMEs: SMEs should align their operations with the global net-zero target and seek opportunities to reduce emissions through innovative business models, products, and services. Incentives and support programmes from governments and financial institutions can help SMEs transition to a low-carbon economy.
5. Collaboration is key to climate action
Lastly, the report emphasises that tackling climate change requires international cooperation and collective action at all levels, including businesses, governments, and individuals. Chairman of the Intergovernmental Panel on Climate Change Hoesung Lee:
“Transformational changes are more likely to succeed where there is trust, where everyone works together to prioritise risk reduction, and where benefits and burdens are shared equitably. We live in a diverse world in which everyone has different responsibilities and different opportunities to bring about change. Some can do a lot while others will need support to help them manage the change.”
Takeaway for SMEs: SMEs should actively engage in multi-stakeholder initiatives, collaborate with industry peers, and participate in public-private partnerships to accelerate climate action. By working together, SMEs can contribute to a more resilient and sustainable global economy.In conclusion, the IPCC 2023 Climate Report serves as a crucial reminder of the urgent need for us to act now, for tomorrow. It is time that we walk the talk. After all, sustainability is something we do together.
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