IPCC Assessment Report? and Implications to Corporates

EcoVision
2 hours ago
3 min read

The Intergovernmental Panel on Climate Chan (IPCC) AR (Assessment Report) is the United Nations’ most comprehensive scientific evaluation of climate change.

Here is a quick explanation:

What it is:

A major report published every 6–7 years by the Intergovernmental Panel on Climate Change (IPCC).

It summarizes all the latest scientific research on climate change.

What it covers:

How and why the climate is changing

Impacts on ecosystems, economies, and societies

Future climate risks under different emission scenarios

What actions can reduce emissions and adapt to climate impacts

Key Findings from IPCC AR6 (the latest one)

Human influence has unequivocally warmed the atmosphere, ocean, and land.
Global surface temperatures are at their highest in at least 2,000 years.
Extreme events such as heatwaves, heavy rainfall, droughts, and wildfires have become more frequent and severe due to human‑caused warming.
Sea levels are rising faster than previously projected because of accelerating ice‑sheet melt.
Every additional 0.5°C of warming increases the severity of climate impacts, especially for vulnerable regions. (remember the climate tipping point in previous newsletter?)
Limiting warming to 1.5°C requires deep, rapid, and sustained reductions in greenhouse‑gas emissions across all sectors this decade.
Net‑zero CO₂ emissions by mid‑century is essential to stabilize global temperatures.
Delayed action raises transition costs and increases the likelihood of irreversible impacts (e.g., ice‑sheet destabilization, biodiversity loss).

Meanings & Impact on Big Corporates

• Stricter regulations and disclosure requirements

Governments are adopting emissions caps, carbon pricing, and mandatory climate‑risk reporting (e.g., EU CSRD, ISSB standards, U.S. SEC rules). Corporates must prepare for legal exposure and compliance costs.

• Higher transition costs

Companies face rising costs for decarbonization, supply‑chain redesign, energy system changes, and low‑carbon technology deployment.

• Increased climate‑related financial risks

Physical risks: disruptions from extreme weather, heat stress, water scarcity, and infrastructure damage.

Transition risks: stranded assets, policy shocks, changing consumer preferences.

• Shift in investor expectations

Institutional investors are prioritizing sustainability metrics and climate‑aligned portfolios.

Poor performers may lose access to capital or face higher financing costs.

• Increased pressure on supply chains

Major buyers are imposing science‑based targets on suppliers, pushing decarbonization requirements through the value chain.

• Market and competitive impacts

Companies that fail to innovate risk being overtaken by low‑carbon competitors.

Opportunities expand in sectors like renewable energy, EVs, green hydrogen, circular materials, and carbon removal.

• Reputational risks and consumer behavior

Consumers increasingly prefer climate‑responsible brands.

Companies risk backlash, loss of market share, and higher ESG scrutiny.

• Litigation exposure

Growing climate‑related lawsuits target corporates for misleading claims, failure to transition, or contributions to environmental damage.

Background of the IPCC Assessment

The Intergovernmental Panel on Climate Change (IPCC) assessments are the world’s most authoritative scientific evaluations of climate change.

Background of the IPCC Assessment

• Established in 1988

Created by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO) to provide policymakers with objective scientific information about climate change.

• Purpose

To assess the latest scientific knowledge on:

– climate change drivers

– impacts on natural and human systems

– future risks– mitigation pathways

– adaptation strategies

• Not original research

The IPCC does not conduct experiments or collect new data.

Instead, it reviews and synthesizes thousands of peer‑reviewed scientific studies worldwide.

• Assessment Reports every ~6–7 years

Each Assessment Report (AR1 to AR6) summarizes the state of climate science at that time.

AR6 (the Sixth Assessment Report) was released between 2021–2023.

• Three Working Groups + Special Reports

– WG I: The physical science basis

– WG II: Impacts, adaptation, vulnerability

– WG III: Mitigation of climate changeSpecial reports focus on specific areas (e.g., 1.5°C, land, oceans and cryosphere).

• Global collaboration

Each assessment involves hundreds of scientists from many countries, with thousands of expert reviewers and government comments to ensure scientific rigor and neutrality.

• Policy‑relevant, not policy‑prescriptive

The IPCC provides scenarios and evidence but does not recommend specific policies.

• High transparency and consensus process

Summaries for policymakers are approved by all member governments, establishing broad consensus and legitimacy.

*The most recent completed major publication is still the IPCC Sixth Assessment Report (AR6), released between 2021–2023. AR6 remains the latest full assessment.