New IPCC Report Confirms What Companies Already Know: Climate Change is Changing How Business Gets Done
HSBC, VF Corporation, insurance firms provide insights on key business sectors
In the wake of a new Intergovernmental Panel on Climate Change report re-confirming the reality of climate change and clarifying its effects, business and investor leaders talked today about the ways in which global warming is already affecting their bottom lines and their strategies.
Representatives from the apparel, insurance and financial sectors echoed many of the key findings in the IPCC report issued earlier today in Stockholm. They said innovative business solutions and aggressive government policies are critical to managing the economic adjustment to a warmer world and avoiding more damaging impacts in the future.
“The IPCC’s report’s conclusion is unequivocal – climate change is happening and it’s disrupting all aspects of the global economy, including supply chains, commodity markets and the entire insurance industry,” said Ceres president Mindy Lubber, whose sustainability advocacy group organized today’s media briefing. “Business momentum is growing to innovate new strategies and products to manage climate risks and opportunities. But scaling these efforts to levels that will slow warming trends will require stronger carbon-reducing policies globally.”
Business support for policy action on climate change is further exemplified through Ceres’ “Climate Declaration,” ( www.ceres.org/bicep/climate-declaration ) which is now being supported by nearly 700 companies. The Declaration calls climate change “one of America’s greatest economic opportunities of the 21st Century.”
For VF Corporation, a North Carolina-based global apparel company which announced its support for the Climate Declaration today, “the challenges associated with climate change are becoming ever more clear, especially in the light of the new IPCC report,” said Letitia Webster, the company’s director of global corporate sustainability.
VF Corporation, whose brands include Lee, Wrangler and The North Face, is one of the world’s largest single purchasers of cotton. “We source our cotton globally, but much of the world’s cotton comes from areas that are expected to be impacted most by water scarcity and extreme weather – specifically, the Western U.S., China, Pakistan and India,” Webster said.
Outdoor recreation impacts are another challenge. “Whether in mountains or the ocean, our brands and our consumers are feeling the impacts of climate change,” Webster added. “The ski industry, for example, is seeing winters that are two weeks shorter, with two feet less of snow, on average, per year. This means resorts are opening later, which translates to less skier days, which could mean less ski-related business for The North Face.”
Webster said the company has comprehensive plans for managing climate risks, including responsible sourcing strategies for cotton, utilizing more renewable energy at its facilities, and ramping up water and energy efficiency improvements across its business.
Financial firm HSBC echoed the IPCC report’s key conclusions by issuing two separate reports of its own in recent days. The reports focused on which G-20 countries face the biggest climate risks and the global outlook for stronger climate policies in the next three years.
“The IPCC report provides firmer foundations for policy action. For the world’s capital markets, climate change is an issue of strategic risk management – and by continuing to pump greenhouse gases into the atmosphere, we are putting ‘the weather on steroids,’” said Nick Robins, head of the Climate Change Centre at HSBC. “We know that temperatures continue to warm and that impacts are fully in line with what we would expect from a warming world, including rising sea levels and melting glaciers. And this is affecting economies today. Our research shows that India, China, Indonesia, South Africa and Brazil are the G-20 nations that are most vulnerable to climate risks.”
“We expect the succession of IPCC reports into 2014 to provide a renewed impetus to policy and business action through to the finalization of negotiations in December 2015,” Robins added.
Insurance executives from Europe and the United States also supported the IPCC report findings.
“When a body like the IPCC concludes that with 95% certainty mankind is causing climate change we would be foolish not to listen,” said Mark Way, who heads reinsurer Swiss Re’s sustainability work in the Americas. “And yet we are still not listening closely enough. The transition to a low carbon economy and a more climate resilient society cannot be thought of as options, they are necessities. Swiss Re is committed to playing its role in tackling climate change, and we have just reinforced this by announcing we will join an initiative that pledges companies to source 100% of their energy needs from renewable sources by 2020.”
“The insurance and reinsurance sectors are operating in an increasingly uncertain environment impacted by climate change,” added Lara Mowery, head of the global property specialty practice at Guy Carpenter & Co., a leading global risk and reinsurance firm. “In this evolving risk landscape, identifying and understanding the causes and potential future consequences of climate change are essential to implementing workable risk management solutions. The IPCC report provides vital information for this ongoing industry exercise.”
Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of more than 100 institutional investors with collective assets totaling more than $12 trillion. For more information, visit http://www.ceres.org or follow on Twitter @CeresNews.
Additional Information Contact:
Peyton Fleming of Ceres
phone: 617-247-0700 x 120 or cell: 617-733-6660