Responding to climate change is a priority issue for ERM, our clients and society, and deeply influences the way businesses interact with governments, customers and local communities. The recently published Intergovernmental Panel on Climate Change (IPCC) special report Global Warming of 1.5 ºC clearly describes the key impacts and differences between 1.5 °C and 2°C of warming. The IPCC urges immediate global action in rapidly reducing carbon dioxide emissions at an unprecedented pace and scale.
Why climate change is a hot topic:
- The 2018 IPCC special report indicates that global warming is worse than scientists had previously anticipated. Significant action is needed immediately to strengthen the global response. At the same time, global demand for energy is predicted to continue to rise.
- Increasingly, governments, regulatory bodies and stock exchanges are calling for companies to provide information to investors, lenders, insurers and other stakeholders on the physical, liability and transition risks associated with climate change. To appropriately incorporate the effects of climate change into their planning processes, organizations need to consider how resilient their business model is to climate-related risks and opportunities as well as the financial implications under different conditions. One way to assess such implications is through the use of scenario analysis.
- In addition, the IPCC special report clearly indicates that we must remove carbon dioxide from the atmosphere alongside reducing greenhouse gas emissions. ERM is actively involved in carbon capture, utilization and storage projects, which provides a viable option to significantly reduce industrial carbon dioxide emissions as well as other emerging solutions. ERM is also working with clients on natural climate solutions to help reduce carbon emissions and store more carbon in the landscape.
- To meet the reductions in carbon envisioned by the IPCC special report, governments and organizations are exploring alternative renewable energy sources. One of the emerging areas of interest is hydrogen and ERM, in particular, is working with clients on evaluating the impacts of hydrogen as a viable energy source.
- Given this context, our clients are looking at:
- Setting public emissions targets in line with the best available science. ERM is a leader among our peers by setting our own Scope 1, 2 and 3 emissions targets approved by the Science Based Target Initiative.
- Determining how to reduce the amount of energy required in future operations and sourcing it from less carbon-intensive sources.
- Capitalizing on the changes through exploring business opportunities associated with the transition to alternatives.
- Collaborating with other organizations to determine how their waste might be another organization’s feedstock.
In responding to the impacts of climate change and the pressures to alter how they source and use energy, companies in all sectors are pursuing innovative opportunities across their value chains to operationalize sustainability. For example, they are embedding greenhouse gas emission reduction programs into operations and beyond as part of day-to-day operational excellence, and driving such change into their supply chains. Similarly, plans are being made to transition away from carbon-intensive assets with some assets being retired, while new low-carbon infrastructure is being built. This transition is facilitated by the shift to digital technologies and smarter use of data.
We are also working with organizations on the critical role of forests in removing carbon dioxide from the atmosphere, and are involved with initiatives leading into the Conference of the Parties on biological diversity in 2020. For example, ERM in France is a partner in the act4nature biodiversity initiative of Entreprises pour l’Environnement, the coordinator of the European network of the World Business Council for Sustainable Development. As a partner, our operations in France has pledged to meet specific commitments supporting biodiversity.
Based on the results of our 2018 survey
Based on the results of our 2018 survey, The Journey to a Sustainable Business – Navigating the road ahead, data shows us that Chief Executive Officers, Chief Financial Officers, Chief Information Officers and board members are paying greater attention to, and influencing, climate-related strategy and management, in response to investor demand for better information and more accountability from companies.
We found that executives are now serious – and intensely practical – as they confront the growing business risks and opportunities associated with client change, population change and natural resource constraints.
The Journey to a Sustainable Business: Navigating the road ahead – Results from survey of 150 executives globally