When it comes to threats, let’s listen to the scientists

The 20th century was characterised by the prolific use of fossil fuels, for good and for bad. It enabled the Industrial Revolution, which was a catalyst for economic and societal development, yet we have already reached – exceeded – the sustainability threshold for the burning of fossil fuels.

Known as Earth Overshoot Day, this is the day that marks the point at which humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year. Earth Overshoot Day falls on August 1 this year. This is a sober reminder that we must change.

We are now in a different century and the effects of climate change are causing us to question whether business and nature can even co-exist.

We can see the damage burning fossil fuels causes: melting ice caps, extensive wildfires, water scarcity, food scarcity, deforestation, poor health and so on. Humanity is starting to suffer – witness the plight of people affected by forest fires or frequent flooding – but it will suffer much more from the effects of climate change and biodiversity loss in the future.

So how will these threats affect you and the world you live and work in? It is time to take stock and take these threats seriously by listening to the scientists and acting on what they say.

The voice we don’t hear enough

The vast majority of climate scientists have reached a consensus on anthropogenic causes of climate change, but the voice of the research community is not being heard in the right places. That is where boards and Chairs have a role to play. They must seek out and promote good, independent, peer-reviewed science and act upon it through strategic reviews and long-term planning. And they must challenge cognitive hacking, misinformation based on vested interests, old thinking, convenience and habits.

Governments too must act on the facts, as presented by scientists, in a synchronised way beyond political short-term cycles. To effectively combat climate change, we need concerted efforts not only from policymakers and industry leaders but also from individuals and communities to collectively reduce greenhouse gas emissions.

And we must be prepared – not just for transition but also mitigation and adaptation to climate change. That will take substantial investment, but the costs of inaction are far higher.

Solutions for climate change will also address other pressing needs including access to energy, health and a just transition. According to ‘Nature’, in 2021, some 675m people worldwide still did not have access to electricity. Trends indicate that 660m people, many of them in sub-Saharan Africa, will remain without electricity by 2030. And 1.9bn people will still be using polluting and inefficient cooking systems fuelled by coal and wood.

That is why – and for many other reasons – we expect to see from COP29 concerted efforts to act in chorus to bring about that step change. And investors, insurers and the rest of the financial services industry have a role to play in shifting from short-term to long-term mindsets.

We have made progress

When we consider the harm already caused, we must look for inspiration to those sectors and companies that have made progress. Renewable energy is a case in point. Progress has been good and is accelerating. We must go further, faster.

This is the Clean Industrial Revolution. The green transition is an enormous business opportunity across all sectors, allows countries and communities to carve out energy independence for themselves so they are not overly reliant upon fossil fuel hegemons, provides an opportunity for countries that did not benefit from the original fossil-fuel led Industrial Revolution and is good for the planet. And we already have a roadmap for transportation thanks to the advancements in electric vehicles.

The progress made in relation to renewables and electric vehicles has resulted from acting on science, engineering, research and investing in the future.

None of this exists in a vacuum. Consistent political leadership is key. The onus is not on business alone to solve these challenges; we need political leaders to act in the global interest and ignore the siren call of populist politics and how it can shift the conversation.

So, let’s stay close to the science and use it to incentivise change from the top (by governments) through clear frameworks and incentives – done in the right way – and action by companies that truly shift the dial. And let’s stop incentivising polluting practices.

The problem is short-term thinking…just getting by and kicking the can down the road while ignoring the externalities of burning fossil fuels. It is by addressing the long term that those nightmarish ‘Mad Max’ post-apocalyptic raiders mentioned in our FT campaign will be kept at bay.