António Guterres, the UN secretary general, has called out fossil fuel companies on their “grotesque greed” in light of unprecedented profits during the second quarter of 2022. During this period:
Guterres stated: “It is immoral for oil and gas companies to be making record profits from this energy crisis on the backs of the poorest people and communities, at a massive cost to the climate”.
He called for governments to introduce a windfall tax on these profits, and to do more to accelerate the renewable energy transition.
Scientists explore catastrophic climate change and urge for more research
In a paper published this week in PNAS, scientists have reported ample evidence of the potential for catastrophic climate change and stress that such “climate endgame” scenarios are dangerously unexplored.
The authors report that humanity is already of track for between 2.1 °C and 3.9 °C warming by 2100. While meeting optimistic targets and pledges may reduce this warming, there is still a risk of reaching potential tipping points and triggering feedbacks in the carbon cycle that lead to abrupt and irreversible changes.
Examples include the release of methane and carbon dioxide from thawing permafrost and emissions from wildfires.
The paper outlines four key reasons a climate catastrophe is concerning to humanity:
Firstly, history shows that periods of climate change have been a factor in numerous mass extinction events and in the collapses of multiple human societies.
Secondly, extreme threat multipliers could be triggered by climate change, including conflict, disease, and spillover risk.
Thirdly, indirect stresses (land loss, food insecurity, economic damage, and water insecurity) could snowball into system-wide failures.
Lastly, there are significant latent risks arising from climate change, limiting humanity’s ability to overcome other potential threats.
The authors urge the scientific community to expand their research into this field, stating that failing to do so is “naive risk management at best and fatally foolish at worst”.
They argue that understanding “climate endgame” scenarios allows for proper risk management, decision making, and policy interventions, which may help to minimise the catastrophe.
UK regulators find issues with companies’ climate-related disclosures
The Financial Reporting Council (FRC) and the Financial Conduct Authority (FCA) have released recommendations for corporate climate reporting following issues with companies insufficiently reporting to the Taskforce for Climate-related Disclosure’s (TCFD) standards.
The regulators found that while many companies were reporting Scope 1 and 2 emissions, Scope 3 emissions were often left out. Additionally, Scope 3 emissions were often not included in net-zero statements.
Net-zero statements were also found to lack clarity due to an absence of historical data and explanations.
Few companies were found to explain how their boards take information about the governance of climate-related matters into account, and many companies’ assessments of risks and opportunities were insufficient.
In light of these findings, the FRC and FCA identified several areas in which disclosures need to be improved. These include:
Providing more granular information about the effect of climate change on different business sectors and geographies.
Balancing the discussion of climate-related risks and opportunities appropriately.
Linking climate-related disclosures to other risk management and governance processes.
Explaining how they have decided which climate-related information should be disclosed.
Explaining more clearly how the effects of different global warming scenarios, and their own net zero commitments, may affect the valuation of their assets and liabilities.
