On December 6, 2023, the Global Tipping Points Report was released at COP28. Led by Professor Tim Lenton from the University of Exeter’s Global System Institute and funded by the Bezos Earth Fund, the report included the insights of more than 200 researchers from over 26 different countries and 90 organizations. The report spans Earth system tipping points and their impacts, the governance of the associated risks, as well as positive tipping points in technology, the economy and society.

‘Tipping point’ discussions often generate quite a bit of media buzz; rightfully so, as the impacts of crossing tipping points can be devastating. Yet, while this term is thrown around quite a bit, corporate leaders often don’t fully understand what an Earth system tipping point is, and what it may mean for the future.

The response of Earth systems to various stressors is complex. The magnitude and direction of these responses are well understood in some systems. For example, the relationship between carbon dioxide in the atmosphere and global average temperature is well known: as carbon dioxide concentrations rise in the atmosphere, so do global average temperatures. Other systems behave less expectedly and in a non-linear manner. Some systems can respond to a stressor only to a certain point or threshold – after that threshold is reached, the change in the system is self-sustaining, even if the stressor is removed. The phrase ‘Earth system tipping point’ is used to describe this phenomenon.

Many potential tipping points have been identified in Earth’s systems, and the report outlines over 25 tipping points spanning the cryosphere, biosphere, ocean and atmosphere. Of these 25+ tipping points, five were determined to be close to ‘tipping’ based on the current global average temperature increase of ~1.2°C. These included:

• Loss of warm water coral reefs
• Collapse of the West Antarctic ice sheet
• Loss of the Greenland ice sheet
• North Atlantic circulation collapse
• Widespread thaw of permafrost

While the authors note that we do not know for sure when the tipping points will be crossed, every tenth of a degree matters in pushing systems to their brink. If we surpass the Paris Target of 1.5°C, other systems inch closer to their tipping points. These include ecosystems – such as mangroves and seagrass meadows – which play an important role in climate mitigation, compounding the climate problem. Currently, the world is not on track to meet Paris Targets. An October 2023 Nature Climate Change study indicated that given current emission rates, the remaining carbon budget (a metric used to define the amount of CO₂ that can be emitted without surpassing a given temperature) that gives the world a 50% of chance of keeping warming below 1.5°C will be reached in 6 years. Further, while the UAE Consensus from COP28 committed to ‘transitioning away’ from fossil fuels, it did not outline specific timeframes for doing so.

The global impacts of crossing tipping points are enormous. The decline of, or complete loss of, ecosystems threatens innumerable flora and fauna, as well as the economies that depend on these resources. In the case of melting ice sheets, subsequent sea-level rise likely wouldn’t be realized for centuries to come, but even current rates (without tipping the system) threaten between 250-400 million people by 2100 – and many of the world’s largest cities. These impacts will further exacerbate existing challenges such as food and water scarcity, displacement of communities, and geopolitical tensions.

In today’s evolving climate, firms find themselves at the intersection of economic resilience, and environmental and social responsibility. Evaluating climate risk across the enterprise is a growing priority for firms, but the focus has primarily been on risks in the near-term to meet compliance targets, and less so on long-term risks with strategic implications. Compliance-focused risk assessments and current scenario analysis methodologies likely underestimate climate-related risks within and outside organizations and their supply chains. These assessments often do not consider tipping points either – potentially setting firms up for failure. While long-term risks seem abstract to decision-makers, the global impacts loom large. They underscore the need for firms to move beyond compliance mindsets and take a longer-term view to mitigate risks, seize new opportunities and futureproof their strategies.