CSIR Turns on the Climate Clock

The climate clock is ticking in India.

The CSIR installed India’s largest climate clock at its headquarters for Earth Day celebrations, aiming to raise public awareness about climate change’s harmful effects.

The climate clock provides real-time data on global temperature increases, indicating irreversible consequences if they exceed 1.5°C. It also tracks the deadline for achieving zero emissions and the lifelines for key solution pathways, providing crucial global data.

The Intergovernmental Panel on Climate Change (IPCC) warns that global warming beyond 1.5°C will pose a significant threat to over 3 billion people in highly vulnerable areas.

Amid a Climate Emergency, immediate action is crucial to prevent catastrophic climate impacts. The next 7 years offer the best opportunity for transformational global economic changes.

Prof. Chetan Singh Solanki, founder of the Energy Swaraj Foundation, emphasized the need for energy literacy among citizens to minimize energy usage.

Dr. Shailesh Nayak, former Earth Science Secretary and Director of the National Institute of Advanced Studies, delivered a lecture on triggered earthquakes in Koyna, part of the CSIR AMRIT program aimed at gaining insights from top scientists.

Dr. N Kalaiselvi, DG-CSIR, emphasized environmental protection on Earth Day, stating that many CSIR scientists and employees completed Energy Literacy Training and installed Climate Swaraj Foundation-supplied climate clocks in labs.

The role of CSO or chief sustainability officer in the rapidly growing financial services industry is changing. More and more CSOs are taking proactive steps to mitigate climate change in a bid to limit global warming to pre-industrial levels.

It must be noted that the IPCC has warned that to limit global warming to 1.5 degrees Celsius, emissions must peak before 2025, then decrease by 40% by 2050, and a quarter by 2030.

Commitments:

A recent Deloitte and the Institute of International Finance (IIF) survey reveals that FSI leaders are aware of time constraints and have shifted their approach to managing net zero internally. According to the survey, 45% of firms now have a chief sustainability officer (CSO), with more business functions taking responsibility for specific net-zero tasks.

The firms must be at the forefront of a whole economic transition to meet decarbonization targets, the Deloitte study notes.

It found that a majority of the world’s largest publicly traded companies have yet to announce net-zero targets. Nearly two-thirds of the companies have not fully specified how they plan to reach them. However, global financial firms are moving ahead at speed, with rapid growth in net-zero commitments, particularly through the Glasgow Financial Alliance for Net Zero (GFANZ).

Key findings:

Financial firms must transform themselves and manage risks to drive real-world change, engaging with customers and markets, and designing credible decarbonization strategies to transition economies to a low-carbon future.

A net-zero commitment is crucial for firms to meet the climate challenge, leading to increased product innovation, enterprise engagement, and faster progress on data sourcing.

The CEO delivers the net-zero strategy, which requires tight program management across multiple divisions and operating layers.

Over 70% of firms now have a CSO or equivalent, and CSOs must be agile change agents. Talent is also increasing, with over 50% hiring to deliver net-zero strategies.

Firms are shifting their focus to new value drivers and opportunities, launching new products to accelerate clients’ transitions.

Risk skillsets are in high demand, and modeling methodologies are maturing rapidly. Firms must design credible decarbonization strategies, focusing on data, communication, and the ecosystem.

The key to effective net-zero communications is transparency, accountability, and authenticity. The only way to meet the unique nature of the climate challenge is through extensive collaboration across the entire ecosystem, including peers, clients, scientists, NGOs, governments, and regulators.

The regional divide:

The survey of global financial firms reveals significant variations in their approach to implementing and executing net-zero commitments.

The study analyzes climate risk management in businesses across different regions. Most firms incorporate net zero into risk management, but regional variations were observed. North America and the rest reported basic integration, while APAC and European businesses had more integration.

Overall, regional confidence in data accuracy was low.

Businesses in APAC and Europe frequently use shadow carbon pricing, with NGOs moderately influencing net-zero commitments. Financial sector cooperation with governmental bodies and public institutions is crucial for energy transition.

European respondents prioritize societal expectations and regulatory compliance, while North American respondents highlight the market opportunity’s scale.

Asia-Pacific participants highlight physical factors escalating climate risk, prompting businesses in developing nations and emerging markets to address the concerns of significant foreign investors.

Businesses in many geographical areas exhibited a similar pattern of integration. However, North American businesses showed similar integration patterns but reported low net-zero strategy integration with overall corporate strategy, customer screening, and product innovation.

Businesses in all regions agree that their governance systems do not effectively represent their net-zero objectives, with North America reporting the least updates or revisions.

The way forward:

The sector already shows an appetite for this challenge and an undertaking to help green the global economy. A growing number of financial institutions have pledged to make their portfolios net zero by 2050 or sooner, and a few have already started measuring their financed emissions.

Forty percent of public companies are reporting scope-3 emissions.

According to a recent report by investment data and research provider MSCI, more and more public companies worldwide are disclosing about their greenhouse gas emissions footprints.

Almost 60% of them reported on Scope 1 and 2 emissions, which is an increase of 16 percentage points in the last two years. The number of companies reporting on at least some of their Scope 3 emissions has increased to 42% from 25% two years ago and roughly 35% last year. This indicates that the pace at which value chain emissions are being reported is growing even faster.

The MSCI report revealed that more businesses are establishing goals for reducing their emissions and that although the rate of goal-setting has slowed, the quality is rising, with a notable increase in decarbonization targets supported by science.

The report showed a stark discrepancy in disclosure between American and international corporations. For example, only 45% of American public companies reported on Scope 1 and 2 emissions, while 73% of companies in developed markets outside of the United States did the same. Similarly, only 29% of American public companies reported on Scope 3, whereas 54% of their counterparts in developed markets did the same.

Goal-setting:

According to the report, despite a slowdown in goal-setting, businesses are still setting climate targets. By the end of January 2024, 38% of companies had declared a net zero target and 52% of companies had disclosed an emissions reduction target, up 1% from the previous year. The quality of climate targets seems to be improving, even though the pace of target setting has slowed. As of 2020, only 1% of companies had set science-based targets aligned with 1.5°C, compared to 20% last year.

MSCI noted that although listed companies’ greenhouse gas emissions seem to have leveled off, they have not decreased despite advancements in disclosure and target setting. The study predicts that in 2024, the direct operational greenhouse gas emissions of the world’s listed companies, or Scope 1, will remain constant at 11.8 billion tons, or almost one-fifth of all greenhouse gas emissions worldwide. Listed companies are currently headed for a 3°C temperature increase this century, according to MSCI’s Implied Temperature Rise metric. Only 38% of companies are on a 2°C or lower pathway, with 11% aligned with 1.5°C.

According to the UN’s Intergovernmental Panel on Climate Change (IPCC), to prevent the worst effects of climate change, global emissions would need to peak by 2025 and then decline by 7% a year until 2030.

The advancement in emissions reporting is being complemented by the expansion of regulatory mandates for climate-related disclosures across various jurisdictions. The EU has introduced new disclosure requirements, while nations are adopting sustainability reporting systems based on IFRS International Sustainability Standards Board’s Scope 1, 2, and 3 reporting standards. The SEC requires reporting on larger companies’ operational emissions but has halted implementation due to legal challenges.

When the dust settles on COP28, it will go down as one of the more momentous ones.

For the first time, the final text includes language on fossil fuels with countries agreeing that fossil fuels need to be replaced with clean energy to reach global net zero by 2050. The agreement calls for a tripling of renewable energy by 2030 and a doubling of energy efficiency.

Although the text contains references to ‘transition’ fuels, the emphasis remains on switching to renewable energy. It also calls for accelerating efforts for phase-down of unabated coal power. The UAE agreement says that new national climate pledges should be delivered in late 2024.

For a meeting that was supposed to focus on climate finance, COP28 was a mixed bag. The Loss and Damage Fund was established on Day 1. The 2nd replenishment of the Green Climate Fund stands at $12.8 billion. The next COP in Azerbaijan in 2024 now becomes the year for finance when major political and technical processes must land to address these gaps.

The Dubai meeting sent some key signals on the need for international financial reform assisting poor nations with the energy transition, and adapting to climate impacts. The lack of accompanying finance makes the energy transition a harder lift.

The adaptation text is weaker than previous versions with few concrete metrics or definitions, but a plan to get there over 2 years. There is a significant reference to rich countries paying poorer countries to use their forests as carbon offsets, which has raised questions about sovereignty and equity.

Trade has been raised as an issue with countries looking to work together on fair aligned policies that support global climate-friendly supply chains. There is a “Roadmap to Mission 1.5 degree C” on international cooperation ahead of COP30 in Brazil, a Brazilian initiative.

Adaptation was supposed to be the 3rd key issue addressed in COP28. Here the final agreement is quite weak and watered down with the text having been cut to exclude targets and timelines, no indication of scaling up adaptation finance, and loopholes to delay/deny financial obligations. On the Global Goal on Adaptation, the language has been watered down from a ‘commitment’ to ‘seek to’. With 84 mentions of the word ‘adaptation’, there is no sense that there are hard limits to humankind’s ability to adapt to climate change, as outlined by IPCC.

But more than all of this, the sheer number of oil and gas executives and big agriculture and meat business representatives present at the meeting shows that these key emitters now see the writing on the wall. We should soon see action from these key industries on decarbonizing. Equity and finance will continue to be key issues well into COP 29 in view of the looming global recession and the wars in Ukraine and Gaza.

The article is written by Gayatri Ramanathan, an Energy and Climate Action Expert. The views expressed are personal.

Tag: IPCC

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