IIGCC: New IPCC report ‘unequivocal about scaling up solution technologies’

The third instalment of the Intergovernmental Panel on Climate Change’s (IPCC) sixth assessment report is “unequivocal about the need for scaling up climate solution technologies, including renewables,” the chief executive officer of the Institutional Investors Group on Climate Change (IIGCC) has said.

Published on Tuesday, the third part of what is known as AR6 is focussed on mitigation. Originally scheduled for release in July 2021, it was delayed for several months by the COVID-19 pandemic and, as highlighted by Eoin Murray, head of investment at Federated Hermes Limited, results from 16 days of negotiation, finished off by a final 40 hours straight line-by-line approval.

“That the summary of this 3rd report has proven to be so tricky to achieve agreement around is perhaps indicative of the issues of energy security highlighted by the current war in Ukraine,” Murray said.

“[The] report is essentially the latest assessment of climate change mitigation, providing a (relatively) definitive guide as to what actions can limit global warming – what further wake-up call is required by our industry of the necessity of shifting to renewables?”

At the IIGCC, CEO Stephanie Pfeiffer said that by highlighting the need to reduce emissions in industry, particularly those on the demand side in energy intensive sectors such as steel, cement and aviation, the IPCC’s latest report made clear “the fundamental and valuable role investors must play in helping companies in such sectors towards decarbonisation”.

“As ever, and as set out by Climate Action 100+’s global sector strategies,” she said, “this starts through effective and meaningful corporate engagement to ensure companies develop and implement credible net zero transition plans.

“This must be the absolute base for companies and investors globally.”

According to the IPCC, the latest report includes several new components in its latest report. These include a chapter exploring the “demand side”, i.e. what drives consumption and greenhouse gas emissions, a chapter on mitigation options that cut across sectors, including carbon dioxide removal techniques, and a new chapter on innovation, technology development and transfer.

“The report is unequivocal in the need for scaling up climate solution technologies, including renewables,” said IIGCC’s Pfeifer. “The investment gap between what is currently being allocated to such technologies and where it needs to be, must be cut rapidly; failure to do so threatens to undermine all mitigation efforts.

“While investors alone cannot solve this problem, working with policy makers, regulators, industry and more, they have the leading role in ensuring the current investment gap becomes a thing of the past.”

Climate action is helping

Pfeiffer also said the report was “a powerful reminder not just to investors, but governments, companies and civil society of the role they all must play in facilitating emissions reductions at scale if global warming is to be limited to 1.5°C”.

“I am encouraged by climate action being taken in many countries. There are policies, regulations and market instruments that are proving effective”

IPCC chair Hoesung Lee

The IPCC said the scientists in Working Group III found increasing evidence of climate action. However, the report also states that limiting warming to around 1.5°C requires global greenhouse gas emissions to peak before 2025 at the latest, and be reduced by 43% by 2030.

“We are at a crossroads,” said IPCC chair Hoesung Lee. “The decisions we make now can secure a liveable future. We have the tools and know-how required to limit warming.

“I am encouraged by climate action being taken in many countries. There are policies, regulations and market instruments that are proving effective. If these are scaled up and applied more widely and equitably, they can support deep emissions reductions and stimulate innovation.”

The IPCC said the report demonstrated that financial flows are a factor of three to six times lower than levels needed by 2030 to limit warming to below 2°C.

There is sufficient global capital and liquidity to close investment gaps, it said, but this relies on clear signalling from governments and the international community, including a stronger alignment of public sector finance and policy.

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