Prince Charles has given a stern warning on the threat of climate change and stressed the urgent need for corporates to play a key role in addressing the challenge.
Speaking to the ACC Global General Counsel Summit in London on behalf of the Prince’s Accounting for Sustainability Project (A4S), he spoke of the “ever-increasing, and alarming threat that climate change poses to our economy and society”.
He said: “It is absolutely crucial that we all do what we can to address these challenges,” he added.
As a growing number of investors, regulators, academics, and others have highlighted, it does not need to be a choice between being profitable on the one hand, and doing the right thing on the other, said Prince Charles. “Both are achievable. Indeed, climate change is increasingly seen as a potentially material, financial risk, and one that must be treated accordingly,” he added.
Last year, the Intergovernmental Panel on Climate Change published a special report on the impacts of global warming, of 1.5° Centigrade above pre-industrial levels, said the Prince of Wales.
“The report makes it clear that we face a number of truly terrifying, and interconnected threats, unless we take really urgent action to limit global temperature rise to 1° or less, since even restraining it to 1.5° will have catastrophic effects. And it is not just us, who face these threats, which are already upon us,” he added.
“We are engineering the rapid destruction of the natural world around us, on which we depend for our ultimate survival, along with many of the species with which we share this planet.
“All is not yet totally lost, but this really is the final call. According to the IPCC report, carbon emissions will need to be cut by 45 percent by 2030, and come down to zero by 2050, in order to have a chance of limiting temperature rises to 1.5°.
“However, I would argue that the most alarming part of the report is the assumption of negative net emissions over the second half of the century. In other words, we will need to find ways to extract more carbon out of the atmosphere than we are emitting with, as yet, undeveloped, and certainly unproven technologies,” said the heir to the British throne.
In response to these threats, investors are increasingly asking companies to provide information in their financial filings on how sustainability performance affects their organization strategy, business model, and bottom line,” said Prince Charles.
“Groups of investors such as Climate Action 100+ are working together to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change through engagement on improving governance, curbing emissions, and strengthening climate-related financial disclosures.
“This represents just one coordinated approach from the investment community. The FSB Task Force on Climate-related Financial Disclosures has released recommendations for companies to report such considerations in mainstream annual financial filings.
“And the Transition Pathway Initiative, led by a global group of asset donors and supported by asset managers, is helping investors assess companies’ preparedness for the transition to a low-carbon economy, supporting efforts to address climate change.
“With recognition finally beginning to dawn on investors and the financial services community that climate change can present a material, financial risk, securities regulators are also responding.
Further, such is the profound frustration over lack of serious concerted action to prevent catastrophe that climate change litigation is becoming an increasingly common form of activism,” he said.
Prince Charles said legal cases seeking to hold businesses and governments to account are becoming more prevalent, and that that all signatories to the Paris Agreement now have at least one policy, or law, on climate change impacting the business community.
“General counsel’s role in helping companies demonstrate that they are seriously working towards mitigating climate impact could play an important part in helping to manage the risks from current, and future litigation.
“The Commonwealth Climate and Law Initiative, which my A4S project is one of the founding partners, recently published a series of papers exploring the legal landscape for company directors, and has also produced practical guidance to help companies put in place the governance measures necessary to respond.,” he said.
The Prince of Wales said: “I feel you really have no excuse not to act on global warming and climate change; the greatest threat multiplier of all. Now I can only conclude by reiterating the real urgency with which we have to take action.
“You have an opportunity over the next few days to consider the role you can, and indeed must, play in building resilience by integrating risk management into business practices, and decision making in your respective organizations.
“With four out of five of the global risks listed by the World Economic Forum for 2019 being environmental, these issues are only going to become vastly more important for your companies, to say nothing of humanity. And so there really is no time to lose. Above all, we owe it to the younger generation,” he added.