Predictably accompanied by media imagery of polar bears on ice floes and power station smoke stacks, last week saw the release of the Intergovernmental Panel on Climate Change’s (IPCC) 5th Assessment Report (AR5). As the Director of the Tyndale Centre for Climate Change Research pointed out at the launch, this is not just another report. It is a body of work which represents the consensus opinion of hundreds (831 to be precise) of the world’s best scientists based on careful scrutiny of all available evidence. Though the complex models used to understand the global climate have markedly improved since the 4th Assessment Report was published in 2007, the key messages are very much the same; “warming on the climate system is unequivocal…the atmosphere and ocean have warmed, the amounts of snow and ice have diminished, sea level has risen and the concentrations of greenhouse gases have increased”.

Some warnings have been upgraded from AR4. For example, anthropogenic greenhouse gas emissions are now ‘extremely likely’ to be the predominant cause of the observed temperate increases rather than ‘very likely’. In other words we are now at least 95% to blame rather than 90%. Faced with these sorts of odds, and a worsening picture, why aren’t more businesses taking a proactive approach to managing climate risks, improving resilience and investing in the opportunities that will inevitably arise?

It is true that the Assessment Report provides few pointers. The IPCC’s most useful insights are yet to come. The report released last week was the first from the three AR5 Working Groups. According to an inside source, there is more bad news to come in the second and third Working Group reports due out next year. Future reports will deal directly with the economics of climate change, adaptation and mitigation. When all Working Groups have reported we will undoubtedly have more certainty around the options and our alternative futures, but we don’t think anyone is expecting the reports to argue for anything other than a renewed commitment to global action on climate change; tougher regulation, and a sharper focus on meeting reduction targets.

The IPCC’s 4th Assessment Report called for a price to be levied on carbon, and there is little evidence to think that the IPCC has changed in views. In fact, calls for the introduction of market-based instruments that address not just carbon but other natural resources and ecosystem services are growing. For example, the UK Government have just responded in broadly positive terms to Realising Nature’s Value, the report of the Ecosystems Markets Task Force, chaired by Kingfisher CEO Ian Cheshire. For businesses looking to flourish, the message is clear:

Be proactive in exploring market-based instruments, add natural capital to your balance sheets and plan for new legislation that raises the price of carbon.