On the heels of COP26, Confluence convened a two-hour virtual seminar to hear from four scientists who are using advanced modeling and hard data to build on the results and implications from the COP26 climate talks. Grounding decision-making in science cuts through the human complexity providing clarity about the tough decisions – and enormous opportunities – before us. As part of Confluence’s Call to Net Zero, this seminar encouraged investors and their investment managers to ground commitments and investment decisions in science-based targets and pathways.
Attendees heard presentations and participated in discussion with all four scientists in a series of small break-out rooms. These were:
1) Using Science-Based Targets to Reach Net Zero with moderator Cynthia Cummis, Director of Private Sector Climate Mitigation, World Resources Institute
2) Pathways to Net Zero: Playing with the Interactive En-ROADS Simulator with Andrew Jones, Co-Director, Climate Interactive
3) New Horizons: Climate Pathways Beyond 2100, with Lindsay Stronger, Professor of Environment and Development, University of York, UK
4) A Microeconomic Approach to Investor Risks, with Dr. Terence Thompson, Chief Science Officer, The Climate Service
Reaching global Net-Zero: What does science say?
Numerous studies have found that approximately 97% of scientists who study Earth’s climate agree that the planet is warming and that humans are the primary cause. Other credible scientific bodies, from NASA to the World Meteorological Organization, agree with this view. Given the competitive nature of the scientific enterprise, this is a large amount of consensus.
There is an area of this that does require more agreement: how do we limit warming and get the globe on the path to reach net-zero? What will it take for countries, cities, companies, investors and other players to lower their emissions and reduce the implications of climate change? The same way we used science to determine the reality of climate change is how we can also decide how to tackle it.
The community doesn’t need a silver bullet, but instead a silver buckshot, to reach net-zero. It will take a mix of multiple actions like environmental protections, sustainable investing and technology development. In addition, it will take the right tools, metrics and common understanding to ensure the actions being taken are effective in achieving net-zero. This will require bold action amongst the private and public sectors to drive ambitious near-term steps to reach long-term goals.
There are leaders in this space making it possible to create the deep structural changes we need in this decisive decade - from microeconomic approaches to investor risk to corporate emissions reductions targets. Here are three main lessons from the tools and models scientists are looking at to reach global net-zero.
Short term targets are essential to long term ambitions
Short term targets are the only way private and public sectors can reach net-zero. Companies can do this by committing to ambitious near-term action by setting 5 to 10-year science-based targets developed in line with the scale of reductions required to keep global warming below 1.5 degrees C from pre-industrial levels. Near-term science-based targets put companies on a trajectory to net-zero without reliance on offsets or other types of carbon credits. These targets provide companies with a clear route of how much and how quickly they need to reduce their greenhouse gas emissions across their full value chain (scopes 1, 2 and 3) and are most popularly validated through the Science Based Targets initiative (SBTi), a global body enabling businesses to take action on climate change, to ensure credibility.
Simultaneously, we have to look beyond 2100 to fully understand the climate impacts of the status quo. The impacts will extend, and likely worsen, beyond 2100 which could include extreme sea level rise, entirely new heat regimes, and vegetation changes. Professor Lindsay Stringer from the University of York (UK) led a discussion about a future with unabated global warming. She presented on her report called “Our Climate Projections for 2500 show an Earth that is Alien to Humans”. Serving as a wakeup call, her work changes the narrative on climate change, and pushes us in the necessary direction to consider long- and longer-term actions and consequences.
There is no silver bullet solution
There is no single solution that will bring the globe to net-zero. To understand what it’ll take in a suite of sectors, En-ROADS allows users to design their own scenarios to limit future global warming and see the impact of specific interventions. Andrew Jones, Co-Director of Climate Interactive, showcased the interactive tool, sharing the resulting emissions pathway from combinations of different investments. He also showed the failure of our current investment approaches, prompting a discussion on the need to change our investing strategies if we are to successfully limit global warming.
One can try your own experiments and assumptions, and get immediate feedback on the likely impacts. It helps users understand the implications and trade-offs that are made when focusing on particular sectors or sticking with the status quo.
Some of the focus areas include energy supply, transport, building and industry, and carbon removal. One can look at how emissions lower with the phase down of coal and the investment in more renewables, or how close the globe can get to net-zero if we keep the status quo on coal, but invest entirely in direct air capture technologies.
Climate risk needs to be quantified
Investors are increasingly interested in climate risks associated with assets and their portfolios. Therefore, the need for climate risks analytics is not only growing, but changing. Quantifying climate risks in their various dimensions is critical for financial players as a result of regulation, investor demand, and undeniable climate impacts. Firms are finding that you can’t manage what you can’t measure, but are lacking the tools to quantify these values.
Dr. Terence Thompson, Chief Science Officer of Climanomics, shared how his organization is helping to meet this demand. One of their approaches is a Service platform (SaaS) that offers analytics and data on physical and transition risk, financial impact, Climate Scenario Analysis, and more. Climanomics has modeled individual corporations and the S&P 500 as a whole, calculating the real risks of inaction. The platform helps identify the what, where and when of climate risks, so decision-makers can devise risk management plans that address risk factors, top properties and risk timings.
The biggest lesson? Follow the science
When it comes to climate change, the facts speak for themselves. One of the most important lessons from the past year is that companies, financial institutions and countries cannot leave out science when shifting their commitments to cut emissions. The tools, services and initiatives are the movers and shakers of reducing global emissions and achieving a global net-zero.
The global community of climate scientists tell us that human activity is causing the climate to change in harmful ways that threaten our future. Now, it’s time for the private and public sectors to align their actions with the demand to cut emissions and achieve net-zero. This will require a combination of solutions, including short-term science-based targets, tools to quantify climate risks and investments in developing new technologies. Net-zero is what we need to achieve according to climate science, and to do so, we can use the same science to inform our choices in how to tackle the largest challenge of our time.
- Kylee Barton, Communications and Brand Officer, Science Based Targets initiative, World Resources Institute
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