Global warming is devastating the planet. Will people take heed when it hurts them financially?
The world is literally burning. No, I am not talking about the recent spate of geopolitical shocks which have rocked entire nations. Instead, this is a more insidious enemy. One that is not easy to confront head on. It is an enemy that is unseen yet does catastrophic damage today and holds even further untold horrors if left unchecked. I am talking of the existential threat of climate change.
To many, this is an abstraction captured by oscillating extremes in heat and cold. But it is ever more menacing. Headlines from the last few weeks have captured a plethora of global extreme events ranging from devastating fires in Canada, Turkey, Greece, and Spain. Algeria on the north coast of Africa and Italy just across the Mediterranean are engulfed in flames while Germany, scarcely an hour’s flight away is ravaged by floods. The list goes on.
At around 1.2 degrees above pre-industrial levels, we are alarmingly close to the 1.5-2-degree threshold outlined where really “tissue damage is done”. Unlike financial data, data on global temperatures go back millions of years. This is based on a myriad of scientific methodologies including but not limited to using glacial ice core samples. More recently, physical observations since around the 1850’s has supplemented the data pool. The current scale and pace of warming is unprecedented in more than 2000 years.
Unfortunately, I believe that framing the problem using a “degree target” tends to underplay the severity of the problem. At 1.5 degrees, environmental degradation may be irreversible. We are talking of a much higher frequency of extreme events like the recent headlines. We are talking social impacts like water scarcity, drought and the collapse of entire ecosystems and countries.
Another disturbing fact is that Southern African nations are among the most at risk, as temperature increases in the region have been observed to increase faster than the global average. Whether we are in these geographies or not, climate change affects us all. What will it take to get society at large, corporations and regulators to notice? Perhaps it lies in trivialities of “smoke taint” on wines where vineyards are exposed to smoke. Or maybe the changing mix in our coffees given the relative weather hardiness of Robusta’s over Arabicas. Alas, this doesn’t move the needle.
Often, it is said that it must hurt in the pocket before we notice. Perhaps when economic interests are threatened, society at large will coalesce toward more decisive action. When loss of property or perhaps higher insurance premiums bite, then the existential threat to lives and our planet will be noticed?
Why am I being harsh in my assessment? Well, the responsibility to arrest the degradation of our planet lies with all spheres of society. The urgency and magnitude of this crisis, this enemy, dictates that action and change are required at a personal, private sector and governmental level. Let’s just spitball some ideas of ‘how’ change can be affected.
Households have choices of what products they buy. They have choices to recycle and to use energy efficient products, to actively not litter. Likewise, societies have choices of holding their governments and their corporations to account.
Corporate boards have a responsibility to not only consider ESG impacts in their respective risk matrices, but to start to incorporate remedial actions through their business initiatives. While ‘triple bottom line’ reporting has become du jour, how many boards have an ESG subcommittee tied to corporate KPIs? Relegating such oversight and decisions to the overall risk committee is likely not enough and a more concerted and strategic lens is required. Time for board members to ‘step up’.
Investing in ESG funds and the changing price of funding for heavy polluters is necessary but not sufficient to accelerate reform of corporate practice. There will always be pools of money who are environment agnostic. That needs to change but is a whole new topic for another day.
Then there are governments. The planet needs more than platitudes from politicians. In a world where pandemic related spending has blown out most budgets, it is common for most global governments to be seeking additional revenue. This is an opportunity to reframe concepts like the much touted “global corporate tax”. Shouldn’t these be reframed along environmental lines?
Conceptually, large global corporations should have a revenue-based tax imposed which is based on their assessed carbon footprint calculated from UNPRI standards. This would require a unified global approach. Surely, the environment could be the one area of global cooperation where all our interests are aligned? These revenues could then ideally be directed to environmentally aligned developments and infrastructure.
There is a lot of wishful thinking in this article. Many of these concepts will take too long to percolate and may never get across the line. However, it is time we do more than talk about our planet on fire.