History Recap
Going back to the industrial revolution (e.g. fuelled by burning coal in the UK) scientists began to realise that increased levels of CO2 in the atmosphere led to increases in global surface temperatures (1850 – 1890ish). Since then there has been a lot of work to prove the link, culminating in the work overseen by the Intergovernmental Panel on Climate Change (IPCC) who alongside others, produce yearly updates on the strength of evidence gathered and impacts. The IPCC has recently produced a publicly available global temperature map with adjustable parameters, that shows the regional effects of different temperature rises. This is a useful, visual indicator when considering scenario analysis, described in a separate blog.
As climate change evidence grew and the effects were starting to be seen, countries grouped together to discuss and agree how to mitigate and adapt to the changing world within the annual Coalition of Parties (COP). Each COP generally focusses on a priority issue, the last one was COP29 in Baku (November 2024) and eventually agreed a finance package for developing counties but the milestone was COP21. This was held in Paris in December 2015 where the then 192 countries (Parties) agreed to limit the increase in the global average temperature to “well below 2°C above pre-industrial (1850) levels” and pursue efforts “to limit the temperature increase to 1.5°C above pre-industrial levels.” – known as the Paris Agreement. There is some evidence that we have now breached 1.5°C increase, however this remains the ambition and is often used as a scenario comparator.
CO2 Emission Reduction Context
So, we know how Climate Change is caused and what has been agreed to, in order to limit the worst effects. It is then incumbent on each individual county to enact the reductions in emissions needed and agreed to, via Nationally Determined Contributions (NDCs). NDCs are promises made by countries to the United Nations regarding the volume of CO2 emission reduction and when these will be made by. The combination of these NDCs is the route to keeping global temperatures below the 1.5 – 2°C increase. However………….
- the best science available currently, estimates that the NDCs stated thus far will lead to a temperature increase of around 2.7°C and;
- full implementation of all current policies needed to achieve the NDCs is thought to be unlikely, therefore a significant increase in NDCs is needed to be Paris aligned.
UK Position
The UK’s policies relating to this are The initial focus for companies was on Carbon and reducing rising emissions causing anthropometrically driven (human caused) climate change. This remains core but has expanded into other environmental factors, e.g. water and waste.
Taxonomies
EU Green Deal, CSDR, ESRS
UK TCFD
IFRS, ISSB, SASB, UK SDR