How the IPCC reports help guide the agenda for sustainable finance
James Maher looks back at the establishment of the UN’s Intergovernmental Panel on Climate Change (IPCC), its recently published sixth assessment report, the importance of its work and the importance that while dealing with current crises long-term environmental goals are not forgotten.
Australian rock band, Midnight Oil, achieved international fame during the 1980s with their anthemic song, “Beds Are Burning”. It contained a not-so-subtle message about Aboriginal land rights and displacement. The song was released in 1987. About the same time, the UN established the Intergovernmental Panel on Climate Change (IPCC). It had a single objective: providing governments with scientific information to build their climate policies upon.

As a long-haired student in Trinity College, although I knew who Midnight Oil were, I had no idea of the IPCC or the task they were charged with. Now, as a middle aged man with children in college. it's fair to say I now know about both of these things, and perhaps pay a bit more attention to the science than the music.

The IPCC are currently working on their sixth assessment report. Their recent publication, Climate Change 2022: Impacts, Adaptation and Vulnerability, contains some very interesting findings. Both the report and the publication underpin work currently underway by policymakers. They underline the importance of not stepping back from the climate agenda, no matter how pressing other geopolitical issues are.

The work of the IPCC and the Scope of the Sixth Assessment Report
The IPCC was established under the auspices of the United Nations Environmental Program (UNEP) and the World Meteorological Organisation (WMO). It is made up of a panel of governments from those respective bodies. The IPCC gathers, assesses and reports on the body of scientific analysis and evidence produced by thousands of scientists, and codifies that information to inform policy. It is through the Assessment Report process that the IPCC establishes the degree of consensus in different areas, and identifies where to direct future research.
James Maher: Coastal cities and settlements play an especially important role.
James Maher: Coastal cities and settlements play an especially important role.

We are currently coming to the close of the Sixth Assessment Report. This is the latest cycle of assessment periods, creating a formalised body of work that assesses the current state of the scientific information to hand, and that is capable of supporting and informing policy makers. The scope and work plan for this current Assessment was agreed upon in 2017. We are now at the stage where the final output of this cycle is being presented.

The body of work and output of the Assessment started with working group reports, the first of which was last summer's report on the Physical Science. The reports draw a line in the sand on the global consensus on the consequences, pathways and timetable of climate change. They shine a light on our best views of the impacts of global environmental damage. They also draw together and establish a global consensus on the need for policy and actions underpinning mitigation and adaptation.

Taking the combined assessment report together, we see humanity's current best endeavours to understand the problem and prescribe the solution. The work is now up to governments, industry and society to agree and implement those policies.

Climate Change 2022: Impacts, Adaptation and Vulnerability (Released February 2022)
Until now, the majority of conversation and policy action has been towards mitigation. However, it's really important that we don't miss the opportunity to consider the output and policy insights arising from the report on Impacts, Adaptation and Vulnerability. This report builds on the Physical Science report and looks to draw together the impacts of climate change. It makes explicit the fact that climate change is complex, compound and cascading.

From a policy perspective, the report summarises 16 findings that have a high degree of consensus within the IPCC. They are organised around the three headings of Impact, Adaptations and Resilience.

Summarising the six impacts and risks there is consensus that a large part of our global population - 3.3 billion to 3.6 billion people - live in contexts that are highly vulnerable to climate change. They also illustrate that climate change and vulnerability fall very unequally as such environmental and social considerations increasing come together.

Among the recommendations and observations on adaptation there is consensus that there are feasible and effective adaptive measures that reduce risks to people and nature. There are also risks associated with maladaptations and short term adaptations. It is really important that there are enabling conditions in place to support adaptation. This is a key “can do” area for government, society, industry and financial sectors to come together.

Among the five recommendations on building resilience, there is consensus that there are ways to harness synergies and avoid trade-offs between mitigation and adaptation. That there are societal choices that can be made in the next decade which will determine our future pathways. Coastal cities and settlements play an especially important role in advancing resilient development.

What does it mean and why no stepping back
The report is an important document. It clearly and comprehensively informs policymakers what needs to be done, but provides a clear timetable for such responses.

Yet again we are confronted with the risk of tipping points, after which the impacts and costs of mitigation or adaptation become unclear or untenable. This is a key decade. But it is now a decade where we are still coming out of a pandemic to be confronted by conflict and the consequences and impacts that arise from it.

At one level, there is a clear impetus to address our dependence on fossil fuel and the move towards fuel security. But there is a near-term hit of inflation, and an acceleration of transition beyond what is manageable.

When we consider the flow of capital and resources towards mitigation and adaptation, there is a demand to support the very necessary humanitarian aid associated with conflict. There is also demand for military investment and armament as geopolitical alliances and confidences founder and the case for protection and defence of our fellow citizens increases. It is perhaps this contention for or displacement of the flow of funds that could be the most disruptive of all.

We have no choice but to address not just the current crises, but to ensure that we do not lose sight of longer-term environmental goals.

“The time has come to say fair's fair. To pay the rent now, to pay our share”
Beds Are Burning, Midnight Oil
James Maher is Insurance Sector Leader at EY.
This article appeared in the March 2022 edition.