Climate Impact and Urgency
Climate risks impact human and business sustainability.
- US$2.5 trillion 2011-2020 financial losses from extreme weather events, US$470 billion in 2017 (WEF).
- Climate crisis could displace 1.2 billion people by 2050
- 250 000 additional deaths per year, from malnutrition, malaria, diarrhoea and heat stress between 2030 and 2050 (WHO).
- US$2-4 billion/year by 2030 in direct damage costs to health (WHO).
- Paris Agreement (December 2015).
- 5% chance of containing global warming by 2100 to under 2oC
- UN Secretary General António Guterres: IPCC AR6 is ‘code red for humanity’.
- Hong Kong Climate Action 2050.
- China: peak carbon 2030, Net Zero 2060.
Climate Governance is important and urgent.
Significant impact on business viability and shareholder value include:
- New rules, regulations and board obligations in Greenhouse Gas (GHG) reduction and climate risk disclosures demanding a climate competent board.
- Major disruption to business operations and supply chain, with cost hikes.
- Stranded assets or asset value reductions without clean tech investments.
- Impaired access to capital and higher cost of capital.
- Without prompt and decisive action, human and ecological impact being potentially catastrophic and irreversible and affecting us all.
Directors are stewards of the future and leaders of sustainable growth. Boards of directors play a pivotal role in leading climate governance to ensure long-term development of the companies under their stewardship.
Directors, it is critical to use the impact of your voice in driving this issue to the top of the agenda through some carefully targeted questions and careful oversight of the actions your board is taking.