The predicted impacts of climate change are worse than expected – and fast outpacing our efforts to adapt. The UN Secretary General Antonio Guterres went as far as saying that, “adaptation saves lives" and “delay means death". The stark reality is that far too little is invested into adapting to climate change, potentially putting lives and livelihoods at risk.
This is the verdict of the latest UN Intergovernmental Panel on Climate Change (IPCC) report on the impacts of climate change and humankind's ability to adapt to them. It comes shortly after the United Nations Environment Program warned that wildfires could increase by 50% by the end of this century.
The new report, described as a major wake up call, explains that the worst impacts are “strongly concentrated among the poorest vulnerable populations". While it predominantly looks at climate impacts on cities, coastal and low lying areas, its findings raise major concerns for communities living in rural areas in developing nations. One particularly vulnerable group is smallholder farmers, who produce roughly 80% of agricultural output – putting entire economies in peril and risking the breakdown of food supplies.
What is notably new in today's report is a focus on solutions to avoid the worst impacts of extreme climate change and limit the damage of extreme weather events, especially in developing nations.
Set up in 2019, the Landscape Resilience Fund(LRF) is one of a few unique ventures seeking to ramp up investment in adaptation in the next five years. The LRF was co-developed by WWF and South Pole, with Chanel coming on board as an anchor investor, to fund adaptation in at-risk landscapes.
The goal of the LRF is simple: fund companies and projects that have the greatest potential to protect people and nature in landscapes facing disastrous climate change impacts. From struggling cocoa growers to forest-dependent rattan producers, the LRF seeks to use an innovative blended finance approach to ensure climate smart ideas flourish into scalable businesses that protect people and nature.
Commenting on the latest IPCC report, Urs Dieterich, Managing Director of the Landscape Resilience Fund, said: “What is happening to our climate right now is scary and shocking – but sadly, not surprising. Scientists have been warning of these impacts for years. A stable climate and healthy natural ecosystems are the fundamental building blocks of our economies, societies and global stability.
“The good news is we are on the precipice of an explosion of innovative solutions geared to helping us all survive, even thrive, in a changing climate. This is where businesses have a pivotal role to play. The LRF is one of a handful of funds seeking to channel private investment into landscapes and communities that will be hardest hit by extreme climate change.
“Given the amount of business rhetoric around tackling climate change, we hope today's message from the IPCC hits home. To truly grasp the nettle, we need to redirect financial flows towards businesses, activities and projects that drive forward resilience to climate change, especially in developing nations."
The gap between what we need to spend on adaptation globally, and what is currently being spent, is growing. This is particularly worrying for developing nations who will experience some of the most extreme impacts, despite contributing very little to climate change. Right now only a fraction of climate finance is spent on adaptation, and of the tracked adaptation finance, virtually none of it comes from the private sector.
Despite being a key concern among most businesses and investors, South Pole's recent net-zero survey shows that climate adaptation is still not an investment priority. The survey found that well over half of polled companies (58%), indicated that climate adaptation was, in parallel with meeting net zero targets, a key priority to fend off the hazards of a warming world. Yet only 7% said they had increased spending on adaptation-related initiatives.
“As the IPCC warns, if we don't act now, the impacts of climate change will increase alarmingly," Dieterich continues. “It's time for businesses to step up and begin investing in adaptation."
With over half of global GDP dependent on nature and its services, nature loss will have a material effect on most businesses by impacting operations and supply chains. Physical impacts aside, inaction on climate resilience and adaptation also threatens a business' reputation and social license to operate.
Looking ahead, multiple trends suggest that companies that do invest in adaptation measures will be better prepared for the colossal climate challenges that are yet to come.
As the IPCC warns, if we don't act now, the impacts of climate change will increase alarmingly. It's time for businesses to step up and begin investing in adaptation. Contact South Pole today to get started on your climate journey.