The Business Case for Climate Action

Posted October 5, 2021

The Business Case for Climate Action
Why Climate Change is Bad for Business

Summary Report #1 on The Intergovernmental Panel on Climate Change 2021 Sixth Assessment Report

Key Takeaways

  • It is “unequivocal” that human activity has contributed to global warming
  • Human-induced local warming of cities and urbanization precipitate things like heatwaves, increases in heavy precipitation events, and stormwater runoff intensity
  • We need to deeply address greenhouse gas emissions (GHGs) and achieve net zero by 2050 if we are going to affectively curb global warming in the next 20 years
  • It is an opportune time for businesses to act on climate change and commit to decarbonization

Table of Contents

1. Background on the IPCC Sixth Assessment Report
2. Action is Critical, and Possible
3. Climate Change is Bad for Business
4. How Fast We Need to Act
5. Climate Action is Good for Business – PPG Can Help
6. Working Together

1. Background on the IPCC Sixth Assessment Report

On August 9, 2021, the International Panel on Climate Change (IPCC) released its Sixth Assessment Report (AR6). The AR6 presents findings from 234 authors from Working Group I on the physical science basis of climate change and required the approval of 195 member countries, diplomats, and scientists. The report addresses the most-up-to-date physical understanding of the climate system and climate change, drawing on the latest advances in climate science, and combining multiple lines of evidence from ancient climate archives, observations, process understanding, plus global and regional climate simulations.

The AR6 report has inspired PPG to strengthen climate lenses in its programming; PPG understands that it is a critical time to ensure the business community is equipped to face the challenges of a changing climate and they must do their part in creating a more sustainable future for everyone. Using AR6 key findings, this special PPG report is intended to inspire motivation and a commitment to action on climate change among the business community, because we cannot work alone. The AR6 provides insight into climate-related risks and challenges that impact urban areas and the IC&I sector and also provides opportunities for immediate action that, if performed collaboratively, can slow future global warming.

For more information on the IPCC Sixth Assessment Report, visit the webpage .

2. Action is Critical, and Possible

Throughout the AR6, language is used to convey “virtual certainty” that human caused emissions has led to climate extremes, such as extreme heat, weather events, and drought. The AR6 provides compelling evidence supporting our need to deeply address greenhouse gas emissions (GHGs) as soon as possible and we must achieve net zero by 2050 to effectively curb global warming in the next 20 years. Without these efforts, the earth will continue to warm and existing climate extremes will worsen significantly.

For members of the PPG community new to the IPCC reports on climate change, it is worth noting that the general level of confidence stating that human behaviour is to blame for climate change is stronger in the AR6 than in the previous report (AR5). IPCC’s AR5 placed a greater emphasis on the impacts of climate change on human health, while the AR6 places a greater emphasis on impacts to the natural systems that humans interact with on a regular basis. Understanding that both are at great risk presents a paradigm shift, which reinforces the relationship between human and environmental health, and affirms that we must protect the environment to protect ourselves.

The COVID-19 pandemic has shown us how reliant we are on the continuity of supply chains, the detrimental impacts of resource scarcity, and how the decisions we make have an influence on the well-being of the whole. COVID-19 has also shown us that collective action can reap significant results. We call on the PPG community examine how the way you do business can support a pathway to net zero and shift the pendulum on climate change.

3. Climate Change is Bad for Business

The AR6 projects that severe agricultural and ecological droughts, extreme heat, and heavy precipitation and associated flooding will become more frequent and intense in North American regions. The AR6 speaks directly about the urban context of climate change, indicating that human-induced local warming of cities and urbanization lead to things like heatwaves, increases in heavy precipitation events, and stormwater runoff intensity. With many of the PPG community doing business in urban contexts, and with suppliers in the agricultural sector and in other parts of the world facing more severe climate realities, it is critical for the business community to assess upstream and downstream impacts related to their operations.

The potential of severe agricultural and ecological droughts can result in food shortages and supply chain disruptions. When growing seasons are impacted and crop production is compromised, both locally and overseas, industries, especially those relying on the exchange of agricultural goods are at risk. Climate change also means that commodity markets are becoming increasingly volatile, which threatens the livelihoods and subsequently purchasing power of at-risk consumers.

The AR6 has high confidence that all regions will experience increases in hot temperatures. Among its impacts to natural systems, extreme heat is particularly detrimental to human and agricultural health. Especially in urban centers, the presence of grey infrastructure and impermeable surfacing are key contributors to urban heat island effect and extreme heat.

There is now stronger evidence since the AR5 that the global water cycle will continue to intensify as global temperatures rise. The result will be increased variability of precipitation and surface water flows and the intensification of very wet and very dry weather in many North American regions. The AR6 also states that human activity is responsible for the global degradation of glaciers since the 1990s, contributing to sea level increases. In coastal cities like Toronto, the combination of more frequent extreme sea level events (due to sea level rise and storm surge) and extreme rainfall/river flow events will make flooding more probable.  

Some of these climate impacts have/will hit certain businesses harder than others, such as those in floodplains or in highly urbanized areas, or those reliant on transporting agricultural goods. However, the AR6 demonstrates that unless we all act now, climate change will show up on everyone’s doorstep.

4. How Fast We Need to Act

The AR6 considers a set of five illustrative emissions scenarios that explore climate response for a broader range of human drivers than was assessed in the AR5. These scenarios also account for natural drivers and natural climate variability (processes intrinsic to the climate system).

Through these scenarios, the AR6 projects with high confidence that even under very low GHG emission scenarios, global surface temperature will continue to increase until at least the mid-century, only starting to decline back to below 1.5 °C toward the end of the 21st century. Unless we commit to significant reductions in carbon dioxide and other GHGs in the next decade, global warming of 1.5 °C and 2 °C will be exceeded during the 21st century. If we do not commit to a decarbonized future, extreme climate events will only worsen, permafrost thawing will be expedited, and the ability of ocean and land carbon sinks to slow down the accumulation of carbon dioxide in the atmosphere will be overpowered. With every additional increment of global warming, changes in climate extremes continue to grow, and the likelihood of unprecedented extreme events globally is very likely.

5. Climate Action is Good for Business – PPG Can Help

As climate change becomes more focal across the globe, there is increasing demand from shareholders, consumers, and asset managers, that businesses commit to net zero pathways. Primary GHG concentrations produced through human activity which have contributed to global warming include carbon dioxide, methane, nitrous oxide, and fluorinated gases. Each of these GHGs are produced through the production and burning of fossil fuels, industrial activities, agricultural and land uses, and the treatment of wastewater and solid waste. The AR6 presents a unique opportunity for businesses to examine how they contribute to the production of GHGs by looking at how they perform their operations, their procurement policies, the energy used to produce materials and deliver services, the life cycle of their products, and the commitment to climate action among partners and suppliers. There are interventions that can make a measurable difference in each of these areas, especially when cooperation and collaboration across sectors and supply chains is emphasized.  

Energy Management & GHG Reduction
Using cleaner and more efficient forms of energy is a critical way that businesses can reduce GHG emissions. If you are a business interested in carving a path to decarbonization while also saving energy, water, and utility costs, contact PPG to learn more about the Energy Leader’s Consortium and SME Energy Management Consortium.

The Circular Economy
Businesses are encouraged to examine how supporting a circular economy is good for business and can help advance net zero targets. A circular economy promotes the notion of waste as a resource instead of a cost and expands opportunities for existing products to serve other functions, plus the expansion of services to facilitate these new functions. Reusing, recycling, repairing, refurbishing, and other circular economy principles help to avoid emissions associated with the production of new goods and the emissions involved in their disposal. PPG members can learn about how to integrate circular economy principles through participation in PPG’s Material Exchange which facilitates the exchange of material generated within the PPG stakeholder community. PPG also expects to launch a Circular Economy Consortium early 2022, supporting members in achieving waste management goals and attaining recognition for their work.

Climate Resilience
From an adaptation and resilience perspective, there are things that businesses can do to protect themselves and their communities. PPG’s Business Case for Natural Infrastructure outlines the various impacts of flooding on private lands and business operations, from supply chain disruptions, infrastructure repair costs, employee absenteeism and more. Natural infrastructure solutions involving vegetation not only sequester carbon but they help reduce urban heat island effect through a cooling effect and manage flood risk by infiltrating and filtering stormwater that would otherwise carry pollutants to the watershed. To learn more about stormwater management, PPG plans to launch Water Stewardship Consortiums in early 2022 as well.

6. Working Together

PPG is committed to strengthening the integration of climate mitigation and adaptation lenses into its programming and leveraging the four performance areas (water stewardship, waste management, energy performance and stakeholder engagement) to inspire action on climate change among the business community. Actions in each of these sustainability areas have potential to directly address human drivers of climate change, such as GHG emissions and sustainable land use practices.

PPG wants to hear from the business community about how it can best support its membership base in aligning with international targets to achieve net zero emissions by 2050, and in preparing for future climate impacts, such as extreme heat and flooding. Please share your feedback by emailing:

PPG members can expect summaries on each of the IPCC’s upcoming reports shortly after their release for the PPG community. These reports include: 

The Sixth Assessment Report Plenary Schedule is as follows:  

  • Working Group II: Impacts, Adaptation and Vulnerability (14-18 February 2022) 
  • Working Group III: Mitigation of Climate Change (21-25 March 2022) 
  • Synthesis Report (26-30 September 2022)