A brief history of climate change
Fossil fuels, global warming, and sustainable development
The Industrial Revolution paved the way for humanity to introduce the massive use of fossil fuels – coal, in particular – to power society. While several scientists are credited for the discovery of the greenhouse effect and its relationship to carbon dioxide in the early 1800’s, it wasn’t until 1896 that a Swedish physicist and chemist developed the first quantitative model to estimate its potential impact on global temperatures. As a result, we know that human activities can impact the environment from the beginning.
Almost 100 years later, in 1987, the Brundtland Commission published a report containing the most widely accepted definition of sustainable development: development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This report also highlighted the idea that issues like climate change, along with others like the ozone depletion and deforestation, are not isolated but rather part of a larger, complex system, that they are linked to unsustainable patterns of consumption and production, and inherently global.
Looking for solutions, the Intergovernmental Panel on Climate Change (IPCC) was formed in 1988, a year after the Montreal Protocol agreement and just in time for the Kyoto Protocol, to provide policymakers with regular assessments of the scientific basis of climate change and its impacts. These assessment reports have shown not only that human emissions are adding to the atmosphere’s natural levels of greenhouse gases (GHG), and that the addition results in warming, but that humanity’s emissions of greenhouse gases are the dominant cause for modern-day climate change – welcome to the anthropocene.
Fast forward to today, climate change poses significant physical and transition risks, like extreme weather events, health-related illnesses, food security issues, and technological and regulatory changes, to people, ecosystems, and the economy. To address this, countries adopted the Paris Agreement in 2015 agreeing to the goal of working to limit global warming to well below 2 degrees Celsius (°C) above pre-industrial levels, with efforts to pursue 1.5°C. Businesses are increasingly expected to recognize their role in the transition to a low-carbon economy and a more sustainable future. Explore how Double Materiality connects to climate leadership and how businesses can proactively contribute to global efforts to mitigate climate change and its impacts.
GHG emissions and corporate sustainability
Climate change will be a material topic for most companies. This is because climate change can impact not only a company’s operations, but it affects supply chains and stakeholders as well. However, companies need to understand their impact in order to make informed decisions, and the same is true for climate. What should your company do?
Step 1: measure
In order to understand your company’s impact on climate change, you must identify and quantify all GHG emissions related to your organization. Learn more about the GHG protocol: A practical guide for companies. Greenhouse Gas Emissions refer to the amount of greenhouse gases released into the atmosphere. These gases include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and other gases that trap heat by absorbing infrared radiation.
The most widely used GHG accounting standard is the Greenhouse Gas Protocol, which provides a framework for businesses to measure, manage, and report their GHG emissions. It classifies GHG emission sources into direct emissions from operations (Scope 1), indirect emissions from the purchase of electricity (Scope 2), and indirect emissions from the value chain (Scope 3).
GHG emissions are a crucial part of sustainability reporting because they allow companies to define a baseline against which progress towards reducing carbon emissions can be monitored.
Discover actionable strategies in our guide on How to reduce greenhouse gas emissions in your company. This is a crucial first step for the company to demonstrate a commitment to climate action. GHG accounting is also necessary to comply with many ESG reporting requirements, including CSRD.
Step 2: set targets
Companies should set targets that align with the level of ambition recommended by science, such as that defined by the Paris Agreement, or stipulated in local legislation to ensure compliance. Quantitative targets allow the company to track progress over time and monitor the effectiveness of its emission reduction efforts.
For certain sectors, companies can follow industry-specific guidelines that better reflect external expectations and sector knowledge. Regardless of the methodology used to define these targets, companies should think both in the near-term and in the long-term when setting these targets.
Step 3: reduce emissions
Corporate climate change mitigation consists of reducing GHG emissions and decarbonization. Energy efficiency improvements can lead to emission reductions, as can reducing the company’s reliance on fossil fuels. Companies should identify and implement emission reduction initiatives to achieve their targets.
Understanding the company’s emissions hotspots is key to developing a relevant emission reduction strategy, and engaging with stakeholders will be fundamental to achieving it. The best way to build a roadmap is to embed climate considerations into the business strategy and all levels of decision making, eventually enabling the development of a climate transition plan.
Step 4: communicate
Companies are expected to disclose their climate impacts, actions, targets, and progress towards these targets in publicly available reports, which are commonly done annually.
Communicating your climate action is not only a legal requirement for some companies, it can be an opportunity to showcase the company’s commitment, improve its reputation and build trust, with customers, employees, and all stakeholders. It is also a way to increase transparency and credibility, which can lead to collaborative business opportunities, and demonstrate sustainability of the company.
Leadership, an ongoing process
The sustainability journey is one of continuous learning, adapting, and improving, and the same is true for climate action. While expectations keep changing, companies must be flexible and evolve, adjusting their approach to meet the needs of their stakeholders, and also those of the planet. Like GHG emissions calculations, sustainability is an iterative process and a long-term journey. Yet, there is a way to make it easier:
- Establish a system to identify and collect data needed for the annual GHG process, emission reduction initiatives implementation, and ESG reporting.
- Leverage the use of tools and platforms that help you measure, improve, and report on your sustainability performance, in line with best practice standards.
- Set clear roles and responsibilities for each step of the process, and focus on capacity building to ensure its effectiveness.
- Monitor and keep track of upcoming regulation on sustainability.
- Collaborate with others in your industry and build partnerships to work together towards your sustainability targets.
Making climate leadership a business priority is not always easy, but there is no better moment to start.
