Time's Up: What the IPCC findings mean for business and its leaders

An exploration into a worrying 'new normal' if we don’t take action

As a climate activist for 10 years, I couldn’t help but feel utterly distraught reading the IPCC’s Sixth Assessment Report this week. But it spurred me into thinking about the role we all have to play to be responsible corporate citizens.

We’re in a period of great volatility that is in need of a seismic shift of economic models, mindsets and real action. But are we ready for it?

Here’s the facts:

  • The planet has warmed by 1.1°C since 1850-1900 and 1.4°C in Australia since 1910

  • Global temperatures are expected to reach or exceed 1.5°C over the next 20 years

  • The past five years have been the hottest on record since 1850

  • The rise in sea levels has nearly tripled compared with 1901-1971

  • Global warming is “​​unequivocally caused by human activities”

To quote the UN Secretary-General Antonio Guterres, “[this] is a code red for humanity. The alarm bells are deafening, and the evidence is irrefutable.”

The science from this report means one thing: our world as we know it has changed. Pandemics, bushfires, floods, hurricanes, cyclones -- you name it -- will come at us like freight trains. This is the new normal, the type of future that will affect our children and future generations to come.

It means we can no longer deny that climate change is a business risk, globally and especially locally. It will impact how businesses operate; the bottom line, product design, supply chain, logistics and employee safety. It will affect customer’s engagement with business, brand reputation and purpose. Australia already bears the brunt of some of the world’s largest and deadliest bushfires, floods and a decrease in snow which will impact the winter tourism industry tenfold.

So, what can we do about it?

To thrive in the new normal, we need a tectonic shift in how we operate and act to protect civilisation.

Governments and businesses must embrace technology and innovation to exponentially help our cause. The right environment must be created. In response to the IPCC report, the local arm of the UN Global Compact, Global Compact Network Australia (GCNA) released a statement urging Australian governments to step up and follow the path of the US and the EU, and that business has the power to influence change.

Thrive client, GCNA Executive Director, Kylie Porter says, “Local businesses have the power to change the narrative, as the fuel for the Australian economy. Their actions and commitment are critical in influencing change. Businesses must commit to emissions reduction targets well below 1.5 degrees, by setting short, medium and long-term commitments. Further, businesses must innovate their business models with circularity in mind, embrace technology and a vision for a sustainable future.”

Businesses -- no matter how large or small -- have a responsibility to act to ensure a sustainable society, economy and planet. We need quick action, shift in mentality and a willingness to embrace new innovation and ideas. Here’s how:

1. Adopt the ‘challenger’ mindset

Brands are racing to get to the ‘sustainability finish line’ to protect and grow market share and revenue. But to do that, businesses need to be the challenger and disrupt the status quo by overhauling business models and current economic systems.

Academics and economists all over the world are creating new models for societies to flourish. Kate Rowarth, an Oxford Economist, says “a healthy economy should be designed to thrive, not grow”. She introduced “doughnut economics”; a re-frame of economic problems in the context of planetary boundaries and social boundaries. Businesses need to be aware of these changing mindsets, advocate for them and adopt innovative thinking into business models.

2. Embrace circular and systems thinking

Embracing systems thinking can help businesses understand how they work in relation to the broader environmental, economic and social factors at play. This will help businesses transition to a circular economy. The circular economy is “a framework for an economy that is restorative and regenerative by design” (Ellen Macarthur Foundation). At this rate, global companies will not survive without incorporating circularity within their everyday operations. Not only does it make business sense with rising market costs for raw materials, it can help reduce environmental footprint when done correctly (case in point British Sugar and even Aussie local Mineral Carbonation International).

3. Responsible investment Money speaks louder than words so use it responsibly to drive the sustainability agenda. The World Economic Forum defines sustainable finance as “the practice of taking environmental, social, and governance (ESG) considerations into account when making investment decisions.” Putting a ‘price’ on sustainability can act as an incentive for suppliers and other businesses to prioritise their own green agenda.

4. Retain and develop sustainable leaders

This one is hard to teach as true sustainable leaders see themselves as part of a whole societal shift. They have particular traits including being morally-driven, empathic, visionary, holistic in thinking and open-minded. As part of this, they thrive on managing complexity, thinking long-term and fully understand interdisciplinary connectedness. Paul Polman, ex-CEO of Unilever is an inspiring example. Sustainable leadership doesn’t have to be at board level or the C-suite either, it can start anywhere.

5. Sustainability audit

Before even thinking about communicating sustainable practices, make sure to have your “house” in order. Conduct a full sustainability audit to understand your leaks. Review the full breadth of your operations, starting with supply chains and its associated enviro-social issues and challenges, raw material use, emissions of transport, materials used in product, end of life waste. But understanding this isn’t enough, action must be taken. Consider measurement tools such as Life Cycle Assessments to see how cradle-to-cradle mindsets can be applied across the business.

Climate change is a wicked problem. There is no ‘silver bullet’ to fix it, instead the onus is on all of us to do our part in preserving a future.

"If we combine forces now, we can avert climate catastrophe. But, as [the IPCC] report makes clear, there is no time for delay and no room for excuses. I count on government leaders and all stakeholders to ensure COP26 is a success" - UN Secretary General Antonio Guterres.

Anissha is an Account Director at Thrive PR + Communications, specialising in sustainability and purpose-led communications and is part of Thrive’s Business, Purpose & Brand Reputation team. Additionally, Anissha is a passionate film producer having documented local environmental issues in Victoria in the film “Our Power” (2020). She is currently deepening her knowledge in the field of Business Sustainability Management at the University of Cambridge’s Sustainability Leadership Institute.

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