Emma Howard Boyd’s speech to the Committee on Climate Change’s Adapting to 3C+ of global warming conference
Before I start my speech, I’d like to add my condolences to the Committee on Climate Change and everyone who knew Professor Dame Georgina Mace.
Georgina’s work assessing the impacts of climate change and the effect of adaptation on the natural environment has never been more important.
Her contribution will help every one of us shape a more resilient world in the future.
That goal is what my speech today is all about.
When you look out of a train window, the trees up-close fly by in a blur, the fields in the middle distance glide past, and the far-off hills don’t appear to move at all.
Similarly, in public life: newspaper headlines fly by in a blur, political shifts glide past, and the natural world doesn’t appear to move at all.
Or so it was… until the climate crisis began to distort and accelerate environmental change.
Today, it is as if when we look out of the train window, we can see the far-off hills gathering speed and catching up with our train.
Without adaptation, climate change could depress growth in global agriculture yields up to 30 percent by 2050, disproportionately affecting small farms around the world.
The number of people who lack sufficient water, at least one month per year, could soar from 3.6 billion today, to more than 5 billion by 2050. We take the first line of COVID defence – washing our hands – for granted in the UK, but Water Aid point out this is a luxury that billions of people can’t afford.
Rising seas could force hundreds of millions of people in coastal cities from their homes, with total costs of more than one trillion dollars each year by 2050.
Climate change could also push more than 100 million people in developing countries below the poverty line by 2030.
No wonder more and more people are experiencing “eco-anxiety”.
I want to thank:
The Committee on Climate Change;
The National Centre for Atmospheric Research;
And, the UK’s Climate Resilience Champions…
…for inviting me, for hosting this event, and for showing leadership on adaptation.
And, I want to apologise if I’ve made everyone’s eco-anxiety worse.
What I really want to do is raise the profile of the UK’s expertise on adapting to climate change.
There are many things to be optimistic about.
We definitely have the knowledge in this country to deliver on the Prime Minister’s ambition for a green industrial revolution that “will create hundreds of thousands, if not millions, of jobs”.
That said, any discussion of the green recovery automatically infers the possibility of significant climate shocks.
The Committee on Climate Change and the Adaptation Committee do a superb job of integrating both agendas.
I hope the Environment Agency’s goal to become a net-zero organisation by 2030, will also demonstrate how to do both at the same time.
And, the joining of the FCO and DFID is an opportunity to improve these links in Government.
As we know, countries most vulnerable to climate risk often criticise developed nations for being too focussed on reducing emissions, rather than helping them prepare.
The new FCDO potentially means we can better unite work to enhance the world’s green economy, with helping our neighbours prepare for the humanitarian impacts of climate change.
Last week, Dr Saleemul Huq, Director of the International Centre for Climate Change and Development at the Independent University, Bangladesh, commended the UK’s push to begin a “race to zero emissions” at COP26, and suggested:
“There could also be a race to zero vulnerability of every country by 2030 as an equivalent to the race to zero emissions.”
Treating mitigation and adaptation as two sides of the same coin is key to the success of the green recovery from coronavirus…
…and also the UK’s ability to inspire a game-changing international agreement at COP26.
Here in England, the Environment Agency has been criticised for saying we are helping the country prepare for 4 degrees of global warming.
The accusation is that we are suggesting such a future will be manageable, and so we are protecting the status quo by overstating our abilities.
Today’s conference feels like an appropriate place to address that.
In 2018, the Intergovernmental Panel on Climate Change said we have 12 years to hold global warming to 1.5 degrees above pre-industrial levels.
Last year, the insurance giant Aviva measured investments in its equities portfolios against the goals of the 2015 Paris agreement, and found they are on track for a 3.4 degree rise.
As a result, they have announced a new 2050 net-zero carbon emissions target for their auto-enrolment default pension funds.
And they should be applauded for that leadership.
But, distressingly, their analysis – calculated using Carbon Delta’s warming potential metric – said the FTSE 100 index as a whole is heading towards 3.9 degrees.
To be reductive, my view is this:
No government or government agency can possibly know what the status quo looks like in either a 1.5 degree or even a 3.9 degree world… but if we don’t take significant action to both reduce emissions and adapt right now, we’re on a hiding to nothing.
Even though the Environment Agency has a huge amount of practical, place based expertise to lend to this effort: it would be daft to suggest that we, or even the Government, can do this alone.
Creating a more resilient country depends on listening, collaboration and action from local communities, through national government and the private sector, to the international stage.
Last month – which (incidentally) was the warmest September on record globally – the Environment Agency’s Flood and Coastal Erosion Risk Management Strategy finished its journey through Parliament.
Which means we can now put it into practice.
To do this we need individuals, communities, charities, businesses, farmers, land managers, and infrastructure providers, to build up the resilience of millions more homes and businesses.
This means the construction of hard flood defences, river channel maintenance and sustainable drainage systems, nature based solutions, property level resilience, and alternative land management practices…
We will work with anyone and everyone – even the beavers – to identify the best combination of measures to tackle unique risks in specific places.
Our work got a significant boost this year, when the Government announced a record £5.2bn long-term investment to accelerate flood scheme construction in England.
It is money well spent: for every £1 used to improve protection from flooding and coastal erosion, we avoid around £5 of property damages.
The Infrastructure and Projects Authority say that between £29 billion and £37 billion of infrastructure projects will be brought to market in the remainder of this financial year.
If even a small portion of those investments is dedicated to resilience, the long term benefits will reward local communities as well as shareholders.
I read the other day that the wildfires in northern California have expanded beyond 1 million acres.
This means the fire can no longer be called a “megafire” but needs a new classification: it’s a “gigafire”.
Last month, the State of California joined the Coalition for Climate-Resilient Investment, launched by Alok Sharma at the UN General Assembly last year.
The CCRI is made up of businesses and organisations that now represent over 10 trillion dollars in assets.
That kind of crazy money shows that adaptation is no longer a niche topic of green finance: people in the City increasingly get it.
Just over a week ago, Storm Alex brought over a month’s worth of rain to some parts of the country… we were lucky it didn’t hit us as it did France and Italy.
But, it’s only mid-October and there’s already a lot of water in the ground.
Everyone needs to be ready this winter, so please check your flood risk and look up what to do in a flood.
The Environment Agency is ready.
During the height of the coronavirus lockdown, we developed safe ways of working enabling more than 90% of flood schemes across the country to continue.
And, consultations continue to be carried out virtually with communities.
The flood schemes will better protect people.
For example, the £11m scheme in Lancaster, ensuring that flood risk in the city is significantly reduced…
… and the £4.8m Marton West Beck scheme that will protect 485 homes in central Middlesbrough against flooding from the beck, the sea, and surface water.
Whether too much water in the form of floods; too little in the form of droughts; or poor water quality from pollution…people’s relationship with water is threatened by changes we see today.
These changes are linked, so our response should be joined up too.
It doesn’t make sense to deal with flood protection and environmental improvements in separate silos.
At the Environment Agency, these teams work closely together, sharing information and expertise…
… not to mention offices and depots…
… because it’s vital to take an integrated approach to water management in catchments.
The River Severn Partnership takes a collaborative approach to deliver resilient development in an area with low productivity but a significant rural economy.
We are working with the community, business and government to make the economy more resilient to flood and drought, while potentially giving the area an annual £11.4bn uplift.
In London, we’ve worked on an innovative regulatory approach to the new super sewer – The Thames Tideway – to help deliver an enormous infrastructure project that will not only lead to improved water quality and habitats…
… but has created 2,800 jobs in construction, will increase flood resilience, and create new riverside public spaces.
The coronavirus has held the world’s attention in 2020, but this was also a year when so many powerful storms formed over the Atlantic, the US National Hurricane Center ran out of names for them.
Adapting to multiple changes all at once can’t be done by looking at the world from one perspective.
In June, the former President of Ireland Mary Robinson wrote:
“It is imperative that the recovery from COVID-19 is completely aligned with addressing the urgency of the climate crisis.
“We need to listen to the young people, to climate-vulnerable states, to indigenous peoples, to women, to the scientists, to environmental defenders, and we need to ensure the global community is supportive of their needs, including action on the provision of climate finance.”
I hope we get our act together in this “climate decade” so we are only heading for a 1.5 degree world, but the economic analysis suggests we’re heading for a 3.9 degree world.
And yet! There are reasons to be positive, as David Attenborough and Prince William’s “Earthshot” prize will no doubt demonstrate.
I look with optimism towards a green recovery from coronavirus in which we both reduce emissions, and also adapt.
But, at the Environment Agency we don’t just hope, we’re getting on with it.
Thank you very much.
Emma Howard Boyd is Chair of the Environment Agency
Original Source: businessgreen.com
Insurance giant’s annual climate report warns the companies it invests in could lose over 10 per cent of their revenues by 2030 under a 1.5C scenario
AXA has today published its fourth annual Climate Report, detailing how its efforts to align its investments with the Paris Agreement have led to a reduction in the ‘warming portfolio’ of its portfolio over the past year.
The report reveals how at the end of 2019 the ‘warming potential’ of its investments stood at 2.8C – still well above the ‘well below’ 2C goal set out in the Paris Agreement, but a marked improvement on the 3C projection for the portfolio that was recorded at the end of 2018.
The company also highlighted how the 2.8C trajectory for its investments compares favourably with an industry average of 3.6C.
Thomas Buberl, CEO of AXA, said the report – which is in line with the French law on energy transition for green and ecological growth and the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) – provided “an essential tool for measuring the effectiveness” of the insurance giant’s climate strategy.
The company has recently pledged to ensure its investments are in line with a 1.5C warming scenario by 2050, and to support the goal it has committed to mobilising €24bn of green investments by 2023 and ensuring it has no coal assets in its portfolio by 2040.
However, Buberl acknowledged that the report “shows that we must collectively pursue our efforts to achieve the objectives of the Paris Agreement, notably in the context of the post-Covid 19 economic recovery.”
The report also reiterates AXA’s previous warning that “a 4C world is not insurable” and highlights the scale of the risks the company and the wider investment sector faces as climate risks escalate.
Specifially, the report calculates projected climate-related costs in 2030 under a1.5C warming scenario for the companies AXA invests.
“Our exploratory analysis also shows that, on aggregate, when using a 1.5C scenario, the companies we invest in may lose 10.2 per cent of their total revenues in transition costs, and eight per cent of revenues to physical costs, but this is partly offset by green revenues equivalent to 7.8 per cent of total revenues, thanks to integration of current green revenues and the results derived from forward-looking green patent investments,” the report states. “Ultimately, and according to this methodology, AXA’s net “company cost of climate” appears to be equivalent to an average 10.5 per cent of the turnover of the companies we invest in.”
The report calculates that the projected loss of revenues would translate into a 3.3 per cent reduction in AXA’s investment value, but it also warns that “this averaged figure necessarily smoothes out heterogenous impacts amongst market players: some will likely be far more impacted than others”.
It also notes that costs could be lower in 2030 under a 3C scenario, as businesses would face lower transition-related costs. But then physical climate risks would increase drastically later in the century under such a scenario as climate impacts escalate.
Original Source: businessgreen.com
Collaboration between the two influential think tanks will see Carbon Tracker’s industry-leading utilities and oil and gas insights accessible to more markets through 2DII’s PACTA tool.
Sustainable finance think tanks Carbon Tracker and 2° Investing Initiative (2DII) have agreed to work together to develop a new climate scenario analysis solution for companies and financial institutions.
The research collaboration will combine Carbon Tracker’s power and fossil fuel industry assessment expertise with 2DII’s Paris Agreement Capital Transition Assessment (PACTA) tool, a free-to-use software platform that allows users to analyse specific companies and measure the alignment of financial portfolios with climate goals.
The organisations said they would now pool their research capabilities to develop a single analytical solution with multiple methodologies that would allow users to customise company analysis based on their needs. The combined approach would make Carbon Tracker’s industry-leading methodology for the upstream oil and gas and utilities sectors available on the PACTA tool, they said.
The open source software, which is backed by the UN’s Principles for Responsible Investment, is underpinned by a vast climate-related financial database that covers hundreds of thousands of securities, companies, and energy-related physical assets.
Stan Dupré, chief executive of 2DII, said the collaboration would provide financial institutions with the “best tools available to develop impact-oriented strategies that contribute to real world greenhouse gas emissions reductions”.
“PACTA is a critical part of 2DII’s efforts to provide the financial sector with the data, tools and knowledge they need to help align financial flows with the Paris Agreement,” he added. “By combining forces with Carbon Tracker, we are reducing the transaction cost of accessing cutting-edge research by bringing together leading research methodologies in one place and harmonising our approaches.”
PACTA has been applied by more than 1,200 organisations with more than $61tr of assets under management, as well as supervisors and central banks such as the European Insurance and Occupational Pensions Authority and California Department of Insurance.
Mark Campanale, founder and executive chair of Carbon Tracker, toasted the new partnership, which he said could play a role in pushing more companies to align themselves with global climate goals. “Collaborating with 2DII on the use of PACTA will make our insights more accessible to the markets,” he said. “This isn’t just about providing analysts with better data. At its core is our goal of ensuring that fossil fuel producers align their business plans with the objectives of the Paris climate agreement of ‘well below 2 degrees’ and that investors can, with this data, play a key role in moving companies in this direction.”
The two think tanks confirmed they would set up a coordination committee for the collaboration that will count research and management staff.
Original Source: businessgreen.com
Former Labour MP and now chair of Lexington’s Responsible Business Practice Mary Creagh explains why all businesses should confront the risks posed by climate change
The days when a company’s health and prospects were measured solely by financial performance are over. After the 2008 financial crisis, the 2015 Paris climate agreement and now the Covid-19 pandemic, investors, customers and stakeholders increasingly expect businesses to publish robust non-financial information to help them assess a company’s reputation, resilience and sustainability.
The coronavirus crisis is shining a light on social factors – how a business treats its employees, customers and suppliers – but challenges remain as to how to effectively evaluate the ‘E’ in ESG. While the government’s new Streamlined Energy and Carbon Reporting (SECR) scheme will help investors measure how well a business is reducing its emissions curve, a company’s exposure to climate risks goes far beyond these metrics. To build a sustainable, prosperous, net-zero economy, environmental factors must be fully integrated into corporate strategy, decision-making and disclosures.
What are climate risks ?
The Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD) categorises climate risks into two types: physical and transition risks.
Physical risks: Flooding is the greatest risk the UK faces from climate change, as the oceans warm and ice sheets melt. Global heating increases the intensity and frequency of extreme weather events, storms, heatwaves and droughts. Farming, food, infrastructure, home building and insurance businesses are all vulnerable to supply chain and operational disruptions. In a 4C world, the current insurance business model ceases to exist.
Transition risks: Companies in high carbon sectors, who fail to diversify and adapt may see their valuations fall, as they are based on ‘stranded assets’ – e.g. oil reserves which can never be used in a 1.5C compliant world. These companies face increased compliance and diversification costs. Whole sectors may find themselves stigmatised, leading to decreased consumer demand and difficulties in accessing finance.
There is also a third, emerging risk: liability risk, which is when people who suffer losses from climate change take legal action to recover damages from those responsible.
What is the UK government doing?
The UK government has legislated to achieve net zero carbon emissions by 2050. Its Green Finance strategy wants to drive capital flows into sustainable investment and manage the financial risks from climate change, through increased transparency. In March, the Financial Conduct Authority announced proposals to improve climate-related disclosures by listed companies. The new rule will require all commercial companies with a premium listing to make disclosures compliant with the approach set out by the TCFD or to explain why not. There is every chance that these proposals will become mandatory in the near future.
The Prudential Regulation Authority has published a framework for practitioners to assess climate-related financial risks. Pensions Minister, Guy Opperman, has changed the law so pension fund trustees must set out how they will manage the ESG risks, including from climate change, to pension schemes. These changes herald a sea change in moving business and financial ecosystems to a more sustainable footing.
How should businesses respond?
Assessing a business’s exposure to climate risk is complex. Companies may feel overwhelmed, particularly if they don’t have in-house expertise. However, there are three steps a business can take to get started:
Ensure you are considering climate-related risk on the business (supply chain, raw materials, operational, flood, heat, water stress, valuation), not the other way around. Companies are used to disclosing their impacts on the environment. The next step is to consider how climate change may impact future business growth.
Assess the materiality of climate risk on your business through a formal assessment and stakeholder engagement process. The results can be disclosed and you can formulate the governance, risk management processes and targets your business needs, to manage and mitigate them. This will give investors and stakeholders confidence that you are asking the right questions and managing risks appropriately.
Don’t let the perfect be the enemy of the good – all businesses can make a start on disclosing climate-related risks in their annual report. Don’t be afraid to bring in experts to speak to your board and senior leadership team, and ask the hard questions and secure buy-in.
Finally, as the economy resets, remember that this is a business opportunity. The UK can show the world how to build and finance the green recovery. Consider what you have learned. How you build back better. And how health, nature, the economy and our climate cannot exist in isolation, but depend on each other for survival. Caring for the planet is now everyone’s business.
Mary Creagh is chair of Lexington’Communication’s Responsible Business practice
Original Source: businessgreen.com
‘A heatwave coupled with a second wave of Covid-19 infections would put enormous strain on our already overburdened doctors, nurses and other key workers’
A great many frailties, structural problems, and inequalities sitting right at the heart of the economy have been exposed by the coronavirus crisis.
The pandemic has, for example, shone a light on the importance of undervalued work such as waste and recycling collections to the day-to-day functioning of society. Some supply chains have been stretched to breaking point, having been severely hit in some quarters by labour and ingredient shortages. The dramatic decline in demand for oil products as lockdown measures kicked in around the world has brutally exposed the dangers of making fossil fuels the global economy’s most influential commodity. And, most impactful of all, the uneven death rates for different communities and the wide range of lockdown experiences have highlighted deeply entrenched social and racial inequalities.
Now, as spring moves into summer in the northern hemisphere, there look to be further challenges ahead which threaten to expose yet more societal fault lines and vulnerabilities as climate impacts escalate.
On a global level 2020 is expected to be the hottest year since records began, and as summer gets underway a number of heatwaves are already being recorded around the world, including in India, Siberia, and the US. Meanwhile, hurricane season is getting underway. Poorer nations with less advanced infrastructure and more vulnerable food systems as ever face the worst climate risks, just as they are at risk from the rapid spread of pandemics.
And richer nations are far from immune from these impacts. The UK has, after all, just experienced its driest May since records began, the Met Office confirmed on Friday, and the National Farmers’ Union has already expressed concern at “worrying dry weather challenges” harming crops. All this comes just weeks after record rainfall and devastating floods in February. The contrast and volatility in weather patterns, which bears many of the hallmarks of climate change, has astounded scientists.
Lest we forget, last summer’s heatwaves across Europe – made five times more likely to occur as a result of climate change – were estimated to have caused an additional 900 deaths in the UK, according to by Public Health England (PHE). And this year, faced with millions of people either furloughed or working from home, and monumental efforts being made to protect frontline NHS services from being overwhelmed by the influx of Covid-19 patients, experts are today warning that a UK heatwave in 2020 could be even more dangerous. It remains a tragic fact that hundreds are still dying every day in the UK from the pandemic, and as summer gets underway, hundreds more could lose their lives if temperatures rise too high for sustained periods this summer.
“After the driest May on record, older people and other vulnerable populations may be at risk from the often deadly heat waves we increasingly see each summer, often exacerbated by climate change,” said Dr Nick Watts, executive director of the Lancet Countdown, which monitors the links between climate change and public health. He is among a number of experts from the likes of Christian Aid, UNICEF, and others warning today that volatile summer weather impacts exacerbated by climate change could undermine attempts to keep the pandemic under control.
A sustained period of high temperatures in the UK could put the NHS under serious pressure, warned Watts, who called for a greater focus on building climate resilience into UK infrastructure and services going forward. “A heatwave coupled with a second wave of Covid-19 infections would put enormous strain on our already overburdened doctors, nurses and other key workers,” he said. “It is clear that rapid emissions reductions are required, alongside further investment in health systems and a range of adaptation measures that will protect against future extremes of weather as well as future pandemics.”
It has long been known that, as weather increasingly veers between extremes in the UK – characterised by higher chances of cold snaps and flooding in the winter, and extreme heat in the summer – UK buildings and infrastructure are woefully ill-prepared. The UK’s Green Building Council has called for all buildings and infrastructure to be made climate resilient by 2030. Recent analysis by the Energy and Climate Intelligence Unit (ECIU) found that, if lockdown measures extended into the winter months in the UK, it could exacerbate already rife fuel poverty. Families living in the draughtiest homes, it estimated, could end up having to shell out roughly £50 more on their energy bills each month just to keep warm at home during the day.
Meanwhile, the government has commissioned an independent, six month review of flood insurance provision in the UK, following devastating floods across many parts of the North of England earlier this year. Conservative think tank Bright Blue has estimated even 70,000 newly-built homes in the UK are at risk of being denied flood insurance in future, having been built in floor-prone areas of England.
And this coming summer, on top of the aforementioned public health risks highlighted by Watts, searing temperatures again risk public transport being brought to a standstill as well as overheated homes, schools, workplaces, and hospitals which remain ill-equipped for keeping occupants cool. Since 2015 the Committee on Climate Change (CCC) has recommended new building recommendations are adopted in order to help guard against overheating, warning that without action the number of people dying in the UK as a result of heat could reach 7,000 a year by 2040.
All totted up, it is perhaps understandable that chair of the CCC, Lord Deben, last year bemoaned the UK’s preparations for such worsening climate impacts as akin to the notoriously ramshackle organisation of characters in the BBC sitcom Dad’s Army.
For its part, PHE yesterday launched its ‘Heatwave and Summer preparedness programme for England’ in a bid to raise public and professional awareness of the health impacts of hot weather. It warns that many of those who are at risk of harm from heat are also at greater risk of severe illness due to Covid-19, and urges the public and employers to take early precautions against these risks.
“The harm to health associated with high temperatures is not inevitable, there are things we can all do to minimise the impact of hot weather on human health,” PHE said in a statement. “Hot weather can happen with little warning and illness and deaths occur within the first couple of days. By the time hot weather arrives, the window of opportunity for effective action is often very short indeed. This means that advanced and long-term planning and preparedness are essential.”
Nevertheless, while it is PHE’s job to manage the health impacts in the immediate term, preventative action is clearly also needed at an infrastructure level to tackle long term risks, and that must take the form of renovating and upgrading homes and offices, and building more resilience into infrastructure and supply chains. That is one of many reasons why the National Infrastructure Commission last week unleashed a wide-ranging report calling on the UK to bolster its resilience efforts in the face of mounting risks from climate impacts and unanticipated shocks such as pandemics.
But if the coronavirus crisis has exposed vulnerabilities at the heart of the economy, it has also demonstrated the remarkable versatility of businesses, policymakers, and citizens to rapidly adapt, and in some cases potentially spurring longer term positive changes. As Britons eschew public transport in large numbers over safety concerns, roads have been widened and closed off to cars in cities such as London, where air pollution has dropped and bike use has shot up. Many businesses have been forced to coordinate their services and workforces entirely remotely, with staff working from home more or less full time and managing their tasks via video meetings and email.
There are positive signs that the current crisis could accelerate efforts to bolster adaptation and resilience, too, with these two key issues at the heart of a letter from more than 200 major businesses yesterday calling on the UK government for a green recovery. The government appears to have broadly welcomed the calls for a green recovery and is reportedly working on plans for a wide-ranging stimulus package that is expected to focus on clean infrastructure. Moreover, Ministers recently re-confirmed a Conservative Party manifesto promise to allocate £9bn of support over the next few years to boosting energy efficiency and shifting to low carbon heating systems. Hopes will now be high that July’s economic recovery package prioritises support for building renovation and infrastructure resilience against, extreme heat, cold, and flooding.
But time is ticking away, and this summer may bring with it weather that highlight just how urgently the UK – and indeed most of the world – needs to prepare for the escalating climate crisis, further exacerbating the threat posed by the current coronavirus crisis in the process. Boris Johnson may have pledged to “build back better”, but the UK also needs to build back stronger.
Original Source: businessgreen.com