Interview: Thelma Krug, IPCC Vice-President

Rhayana Araújo

Online since December 2020, the Grape ESG Platform focused on the best ESG's sustainability practices, in which companies, science, academia and government can discuss how ESG can help society. The platform has reinforced the importance of companies being aligned with science and sustainability. To further address this issue, we spoke with Thelma Krug, Vice-President Intergovernmental Panel on Climate Change (IPCC) of the United Nations (UN), and a member of the Grape ESG Advisory Board.

Thelma talks about climate change and the impacts it can cause on the planet, if there is no unprecedented change in all sectors of the economy - mainly companies and industries. “What is expected is that, with the engagement of all sectors of the economy, all areas of society, the necessary transformation can be made to limit global warming and, thus, minimize or even avoid risks to the human and natural systems”, she stresses.

The Grape ESG platform has shown that companies should have a responsibility to align their business with sustainability and science. In your opinion, incorporating this method has what positive impacts for the company and society in general?

Obviously, it has positive impacts. It is extremely pertinent and opportune to bring those out and communicate the need to align business with sustainability, from the simplest businesses to the most complex ones, such as the production, capital goods and consumer goods industries. In all businesses, it is possible to reduce greenhouse gas emissions, including by increasing the rate of recycling of materials, reduction of waste and waste, development of a circular economy in the industry, replacing materials into carbon-intensive products, renewable materials, such as wood instead of steel or cement in the construction sector, natural textile fibers instead of plastics. There are also a wide range of options for major emission reductions, including low emission heat sources, electrification of production processes. Of course, each case is different and has to be dealt with individually. It is important to understand that the current situation requires that concepts, processes and plans be revisited in the light of the new global reality to combat global warming and reduce the threat to sustainable development. Combating climate change and adressing sustainability must go together.

Science indicates that it is possible to limit global warming to levels that minimize the risks of their impacts. What are the necessary changes that companies must make to help in this process?

The 2018 IPCC Special Report on Global Warming of 1.5C indicates that it is possible to limit global warming to 1.5C above pre-industrial levels by the end of the century, but not without unprecedented changes in all sectors of the economy that necessarily includes companies and industries. These transitions may be possible by increasing the capacity of public, private and financial institutions to accelerate the planning and implementation of climate policies, together with an acceleration of technological innovation, its implementation and maintenance.

For these changes to become a reality, we need all forms of engagement - of course, governments at all levels have great responsibility to align public policies with the climate issue. But there is a great contribution to be made from the private sector, companies to mitigate climate change. The (IPCC) indicates this in its 2014 assessment report of 2014, when it analyzed industrial activities along the entire supply chain, from raw material extraction and recycling, to transformation into product and demand . In this report, emissions from industry are greater than emissions from the end use of the transport and buildings sectors and represent just over 30% of total global emissions of greenhouse gases in 2010 - about 40% if net emissions from Land-Use and Forests are not included in the global total. Industry emissions are mainly related to the processing of materials that are converted into products. The production of iron and steel and non-metallic minerals, mainly cement, results in 44% of all industry's carbon dioxide emissions. Other emissions-intensive sectors include chemicals, including plastic, and fertilizers, paper and pulp, non-ferrous metals, food processing and textiles. It is interesting to note that mitigation activities in other sectors, as well as adaptation measures, can result in greater demand for industrial products and, consequently, higher emissions in Industry. In 2010, Latin America contributed approximately 6% of global direct emissions of greenhouse gases, between 2005 and 2010, emissions of these gases increased at an average annual rate of 2%. These data will be updated in the next IPCC assessment report in 2022. An absolute reduction in Industry emissions will require the implementation of a set of options that go beyond energy efficiency measures, such as efficiency in the use of materials, avoiding the waste, recycling, modal changes in transportation.

What are the risks for the planet in the long run, if companies do not incorporate sustainability into their strategies?

The greater our global warming, the greater the risks will be. Even with a warming of 1.5C above pre-industrial levels (until 2018, human activities had caused a global warming of approximately 1.0C above pre-industrial levels), climate models project, with high confidence, extremes of heat in the most inhabited regions with intense rain occurrences in several regions that could certainly impact businesses. Extreme weather events, such as heat waves, heavy rains, droughts, forest fires, are cited in the IPCC reports as the five reasons for concern and are projected to become more intense and long lasting. As such, they present risks, impacts to human health, livelihoods, assets and ecosystems. Another cause for concern is related to singular large-scale events, which are relatively large, abrupt and sometimes irreversible changes in systems, caused by global warming. Examples include the disintegration of the Greenland and Antarctic ice sheets.

What is expected is that with the engagement of all sectors of the economy, all areas of society, the necessary transformation can be made to limit global warming and thus minimize or even avoid risks to the human and natural systems. The contribution of business, including mainly industries, to mitigating climate change is significant, as indicated above. The intensity of energy use in the sector could be reduced by up to 25% compared to the level of 2010 with the large-scale updating, replacement and implementation of the best available technologies, particularly in countries where this has not been practiced.