Applying ESG in Banking
In this article, we’ll explain what ESG banking is, why it is important, and how you can apply ESG in banking.
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The IPCC (Intergovernmental Panel on Climate Change) was established in 1988 to study the evolution and impacts of climate change, based on scientific knowledge. Every five to seven years, experts’ observations and conclusions are summarized into reports - the last ones being published between 2021 and 2022.
👉 On March 20th 2023, the IPCC shared its long-awaited synthesis report. What is it about? What information is it providing us?
For eight years, the experts analyzed thousands of scientific publications, in order to make it easier for people and policy makers to understand global warming, as well as solutions on how to tackle it. This synthesis has several objectives:
As it stands, the synthesis report of the IPCC’s sixth assessment report is composed of two main parts:
The Secretary-General of the United Nations, Antonio Guterres, introduced this document in these words:
"The climate time-bomb is ticking. Today’s IPCC report is a how-to guide to defuse the climate time-bomb. It is a survival guide for humanity.”
It took IPCC scientists several years to write and publish it, but global greenhouse gas emissions from human activities definitely warm the atmosphere, the ocean and the Earth.
In addition to this, despite the global impacts of climate change, the responsibility for this phenomenon lies primarily with developed countries. 10% of the richest households are responsible for 40% of global GHG emissions. It is the least developed countries (Africa, Asia, Central and South America) that are suffering the most serious consequences of this imbalance.
“The choices and actions implemented during this decade will have impacts now and for thousands of years.”
Climate change has multiple impacts on the Earth and its ecosystems. First, rising temperatures - no matter how small they seem - cause irreversible phenomena such as melting glaciers, ocean acidification and rising sea levels (from 2 to 3 meters if warming is limited to +1.5°C, and up to 6 meters by 2300 in a +2°C scenario). Moreover, even if we limit global warming, these phenomena will continue for centuries, even millennia.
In addition, extreme weather events (heat waves, droughts, torrential rains resulting in floods) are becoming more intense and frequent. Between 2010 and 2020, human mortality from extreme weather events was 15 times higher in vulnerable areas.
It is becoming increasingly difficult - for beings, animals and plants alike - to adapt.
And the situation is likely to worsen as scientists say:
“Between 3.3 and 3.6 billion people live in an environment that is highly vulnerable to climate change.”
Rising temperatures are accelerating the extinction of terrestrial and marine species. Similarly, reducing the availability of resources poses a clear threat to food security.
In addition, there will be:
Structured in three parts (Current status and trends, Future climate change, long-term risks and responses, Short-term responses to climate change), the synthesis remains optimistic. Here are the main suggested solutions.
Despite the current environmental impact, experts haven’t lost hope and say that it’s still possible to limit warming to +1.5°C, explaining:
“A window of opportunity to ensure a livable and sustainable future for all that closes quickly.”
The best scenario involves achieving carbon neutrality by 2050 through a massive reduction in our emissions. Scientists underline the importance of our action during the current decade to fight climate change.
To achieve this, it is necessary to rapidly reduce GHG emissions - particularly methane - across all sectors. The production of fossil fuels (oil, natural gas and coal, which account for 79% of the total score), agriculture, industry, energy and transport are the main sectors of concern. 🚜
The current ecological commitments remain insufficient and lead us to a world at + 2.8°C or + 3.2°C in the worst case scenario. To reverse this trend, States must implement concrete measures to:
All these measures must respect an imperative: ensuring a fair transition of our societies, not to increase inequalities. It is essential to:
“Prioritizing equity, climate justice, social justice, inclusion and fair transition processes can enable adaptation, ambitious mitigation measures and climate-resilient development.”
The synthesis report will indicate the beginning of the seventh round of the IPCC assessment, which will deal with an important period as it is expected to end around 2030 - a key date in the fight against climate change.
In addition, this sixth synthesis report is the latest scientific consensus on climate. IPCC Chair Hoesung Lee underlines its importance:
"Once approved, the synthesis report will become a fundamental policy document to shape climate action during this pivotal decade.”
This synthesis should serve as a basis for the COP28 to be held in November 2023 in Dubai, by providing a first conclusion of the efforts made since the Paris Agreement of 2015. 👌
As a company, your role in protecting the environment is not insignificant. Take control of the carbon footprint of your business and help reduce our greenhouse gas emissions effectively.