Climate Risks To Intensify, Despite Imminent Peaking Of Global Carbon Emissions

Climate Risks To Intensify, Despite Imminent Peaking Of Global Carbon Emissions

Death and taxes are the traditional certainties the world can always count on. For the last 300 years, there is one other element that can be added to this – rising global carbon emissions. Despite growing political will to tackle the problem, the inexorable rise of emissions has continued, following a brief pandemic-related pause.

However, on the eve of COP28: say it quietly, but the world is on the cusp of a historic milestone. It didn’t command the mass media attention it deserved, but the latest World Energy Outlook, published by the International Energy Agency (IEA) in October 2023, anticipates emissions from global energy use to peak in the next three years. These energy-related emissions account for more than three quarters of GHG emissions globally. This view of emissions peaking in the next two to three years is supported by a number of other assessments.

This is a critical moment and, when it comes, deserves serious recognition. However, it is also true that this only marks the end of the beginning rather than the beginning of the end. Peaking emissions is not the same as eliminating emissions. The world’s largest oil and gas firms see ongoing demand for their products and so will continue to invest in new exploration and production. As a result, emissions will continue and the world will keep warming – and policy will tighten further in an attempt to accelerate the downward trend in emissions.

This leaves businesses facing a complicated cocktail of physical, transition and liability climate risks, each of which threaten bottom line performance. Our research indicates most firms are massively underestimating these risks and have inadequate (or non-existent) strategies to tackle them. To even begin formulating such a strategy, many organizations are stymied by a lack of comprehensive and robust data on their carbon emissions and potential climate risks. A robust data capture and management solution is a critical enabler in the design of effective and targeted climate risk strategies. In the last 18 months, Verdantix has supported firms across multiple sectors on their carbon and climate digital strategies. What this work has revealed is that there is no one-size-fits-all strategy for dealing with climate risks. It has also revealed massive challenges in picking through the hundreds of vendors offering digital solutions to support climate strategies.

Next week at our climate summit in London, and in the upcoming webinar ‘How To Select The Best-Fit Carbon Management Software For Your Firm’, we will be sharing a little more about the work we have been doing with our clients around carbon and climate management, as well as revealing our very latest benchmark of the top global carbon management software providers. Beyond that, we will be exploring the most important challenges and opportunities facing corporates around the climate and carbon agenda.