ADDRESSING climate change has moved steadily higher on the corporate agenda. Even as more of the business community acknowledges the fundamentals—that the emission of greenhouse gases by humans is changing the climate in ways that are harmful to the planet and human societies—many also struggle to go beyond those basics. How harmful, exactly? How quickly must we act, and at what scale?
This primer aims to equip busy leaders with climate change knowledge so they can ask the right questions, prioritize the right areas, and make the right decisions.
Addressing climate change:
If you’re already well on your way to addressing climate change in your own organization, great! We hope this primer helps you discover new, factual information that you’ll find useful. If you haven’t started to address your carbon emissions yet, this primer serves as your FAQ guide to go from awareness to action.
Human GHG emissions are the dominant cause of climate change since the industrial age.
The overwhelming consensus of the scientific community is that human activities are the leading cause of the Earth’s warming in recent decades.1
Human actions, primarily burning fossil fuels but also deforestation and other activities, have resulted in a rapid increase in the concentration of greenhouse gases (GHG) in the atmosphere. GHGs, including carbon dioxide, methane, and nitrous oxide, trap heat close to the surface and cause global temperatures to rise. Since the industrial revolution, carbon dioxide concentrations have risen by more than 30%—currently 414 parts per million (ppm), up from 180–300 ppm historically (pre-industrial era).2 The result has been a global temperature increase of approximately 0.2 C per decade; today, mean surface temperatures are approximately 1.0 C (1.8 F) warmer than the pre-industrial period.3
The scientific consensus on climate change is near-unanimous. Where predictions have been incorrect, it has typically been by underestimating the speed and severity of climate change.
The scientific consensus on climate change is robust.
Research indicates that roughly 98% of scientists endorse the conclusion of anthropogenic global warming: that the Earth’s climate is warming and human activity is the principal cause.4
Modeling the climate is highly complex, requiring an understanding of the interactions and feedback processes likely to occur across a wide range of Earth systems. Adding to the challenge, to the best of our knowledge, never before in the Earth’s history have carbon dioxide increases and attendant warming occurred as quickly as what we are experiencing today; we are truly in uncharted waters. Nevertheless, scientists’ climate models have been remarkably accurate at predicting global temperature rise5 (figure 2). Beyond temperature changes, scientists’ estimates have more often underestimated the speed and severity of the impacts of a changing climate (e.g., the melting of ice sheets).6 A range of climate tipping points that would create abrupt and irreversible changes—from the rapid collapse of ice sheets to permafrost thawing to the disruption of critical ocean currents—once thought to be extremely unlikely or only possible with a much warmer planet are now seen by many scientists as “too risky to bet against.”7
Even moderate changes to the climate are likely to have dramatic and damaging consequences that are almost certain to affect every corner of the globe.
We are already experiencing the effects.
Climate change is already affecting many of the Earth’s natural systems. The frequency and severity of natural disasters—floods, hurricanes, fires, droughts, and more—are increasing and can be directly linked to this global phenomenon.8
Climate change is already happening. It also contributes to desertification, sea-level rise, ocean acidification, reduced air quality, rain pattern shifts, and loss of biodiversity. All of these changes can impact economies and human society in profound ways. Climate change is already a factor in more than 150,000 deaths annually across the globe,9 and it could create 143 million migrants by 2050.10 From 1980 to 2019, there was a fivefold increase in billion-dollar weather events in the United States.11
One-third of the population considered most vulnerable to the adverse effects of climate change comes from the world’s least-developed countries, which lack important infrastructure.
Climate change presents a range of risks for businesses across industries, from disrupted supply chains and higher insurance costs to labor challenges.
Companies’ work, workforces, and workplaces could all be impacted.
Worker safety is threatened by many factors including temperature extremes, air quality, water access and sanitation, and disease exposure.
The best available science indicates the world should cut GHG emissions in half by 2030 and reach net-zero by 2050 to help avert catastrophic warming.
The Intergovernmental Panel on Climate Change (IPCC), the most authoritative scientific body on the topic, finds that keeping mean surface temperature increases to no more than 1.5 C is critical for avoiding the most devastating impacts of climate change.
Doing so means cutting global GHG emissions by roughly 50% by 2030 (from 2010 levels) and reaching “net-zero” emissions—releasing no more carbon into the atmosphere than is removed—by 2050 (figure 3).42
Achieving net-zero carbon emission by 2050 would require a radical, top-to-bottom transformation of the global economic system, especially our energy, transportation, and agriculture practices.
The best-case scenario is that we limit warming to 1.5 C; an increase to 2.0 C or beyond is likely.
Half of a degree Celsius difference in global warming may sound insignificant. However, the effects at 2 C are significantly greater than at 1.5 C (figure 4).43 The relationship between warming and impact is not linear, and even seemingly small increases in absolute average temperature matter. The consequences almost certainly get worse and compound as the temperature ticks up.44
The relationship between warming and impact is not linear, and even seemingly small increases in absolute average temperature matter.
More business constituencies are demanding action on climate change.
Important business stakeholders are increasingly prioritizing climate change—and pressing companies to do the same. Businesses’ societal license to operate is becoming contingent on their being good climate stewards.
Averting catastrophic levels of planetary warming presents leaders with an obligation and an opportunity.
Many organizations have already set out on this journey, but those who haven’t should:
For more details on how companies can embark on their journey to become climate stewards, see Deloitte’s research at: https://www2.deloitte.com/us/en/insights/focus/climate-and-sustainability.html.
Deloitte’s Sustainability professionals take a practical and business-focused approach to helping companies build sustainability into their strategy and operations as a way to improve and protect margins, build brand value, and enhance risk resilience with the goal of supporting business growth. We work with companies to evaluate and develop sustainable strategies that can help drive toward near-term and long-term results. Our sustainability consultants are experienced at identifying opportunities across the value chain and across industries to create potential resource-based financial value.