ESG Series: Climate Change, Our responses and COP28

In the previous article, I wrote about the definitions of Sustainability and ESG as well as their origins. In this article, I will dive into Climate Change, the driver behind sustainability and ESG efforts, its importance, causes and our responses from policies and accords to what to expect from COP28.

If Climate refers to the long-term patterns of the weather, then climate change describes the long-term differences in the statistics of weather measured over decades or considerable blocks of time over which statistical data is available (approx.150 years). While we may think of climate change as global warming and increasing temperatures, climate change also includes changes in other aspects of the climate such as precipitation, sea levels and ocean acidification.

The scientific community is beyond doubt that the climate is warming and that humans are primarily responsible. Studies show that the climate has warmed 1.1 degrees celsius since the 19th century. Moreover, the warming we are experiencing is around 16 times faster than the average rate of warming coming out of the last ice age (roughly 6 degrees celsius in 10,000 years). Future temperature change has been predicted by the Integrated Assessment Modelling Consortium over 5 different scenarios for different worlds know as shared socioeconomic pathways (SSPs). Consensus is that we are on track for SSP2 which is a world that follows the trends of today and predicts temperature increases of 3 degrees celsius. So what does this mean?

A few degrees of global warming over the next century would have significant impact to life on Earth and enormous changes to our environment. Think of the trillions in agricultural investment to date and what would be needed to readjust based on changes in landscape, coastal defences or relocation due to higher seas, less wintertime precipitation falling as snow leading to drought and famine, extreme weather events disrupting supply chains and destroying infrastructure. Quite quickly, you start to understand the scale, impact and necessity to do something. So what are our responses?

Our responses to climate change are broadly captured in 3 categories: Adaptation, mitigation and geoengineering.

• Adaptation is responding to the negative impacts of climate change.
• Mitigation refers to policies that try to avoid or minimize climate change, thereby preventing the effects and impact.
• Geoengineering is the active manipulation of the climate system. This is an attempt to manipulate energy balance. Energy balance is the concept that the energy reaching the earth from the sun must equal the energy radiated back from the Earth to space, and this determines the temperature of the climate system. A simple example of geoengineering is carbon dioxide (CO2) removal through planting trees.

Continuing with the example above, why do we want to reduce CO2? Because temperature of the planet is not the only thing that determines the amount of energy the Earth radiates back to space. The composition of the atmosphere also matters. Greenhouse gases are a part of the atmosphere that absorbs radiant heat. These gases in the atmosphere reduce the amount of energy the Earth radiates back to space, and therefore make the planet warmer. The greenhouse effect is caused mainly by water vapour, carbon dioxide, methane and nitrous oxide. Of these, human impact has most significantly impacted the abundance of CO2 in the atmosphere. However, the others trap more heat.

Knowing all of this, what are we as a society doing about it?

The origins of the first climate summit can be traced back to 1979 the first World Climate Summit organised by the WMO framed climate change as an issued to be addressed by global politics. Subsequent variations and initiatives resulted in the first ever “Conferences of the Parties” (COP1) taking place in Berlin in 1995. Since then there have been notable outputs from these COPS such as the Kyoto Protocol (1997) and the Copenhagen Accord (2009), however the most significant and noteworthy was the Paris Agreement (2015) at COP21 which set a goal to hold the increase in global average temperatures to “well below 2 degrees celsius above pre-industrial levels while pursuing efforts to limit the temperature increase to 1.5 degrees celsius”. This agreement set in motion coordination across groups, countries and institutions and the goal of achieving net-zero emissions by 2050.

What to expect from COP28?

Despite the intentions and initiatives, there have been accounts or records of immaterial change in impact at best and worsening trends at worst. There needs to be an exercise of taking stock, demonstrated accountability and putting in effect more meaningful measures. Knowing the UAE, I expect some big announcements to come out of this that will set in motion significant changes in economy, regulation and, most importantly, environment.

Ghassan Zeidan, Founder & CEO of Paragon Consulting Partners

linkedin.com/in/ghassan-zeidan

Risk Management, Internal Audit and ESG Consulting Firm (paragonconsulting.partners)