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Climate change is here and is real
For most people on the planet, climate change is now experienced daily, whether immediately first-hand or as part of the daily news. While the debate around the margin of error in different climate change models continues, the most significant verdict is already in: climate change is happening, and it has important negative implications. Huge amounts of information, data, and analysis on the topic are widely accessible. It is a historically unique phenomenon because it’s happening everywhere. It is a shared challenge and also an opportunity: the shared responsibility to Earth’s future.
Global warming results from the accumulation of greenhouse gas (GHG) emissions in the atmosphere, which trap heat. This leads to negative spiralling effects and scaled-up disruptions. Temperatures rise, weather becomes increasingly extreme and natural disasters occur more often.
There is already so much GHG in the atmosphere that even if emissions were reduced to net zero today, adverse effects would continue to heighten over the medium term. However, since we do, of course, continue to generate heat-trapping gasses, these inevitable negative effects intensify.
The need for positive, bold climate action
The urgency demands positive, bold climate action by people across all spheres. And policy makers, investors, entrepreneurs, and consumers can be bold while being rational and coolly preparing for a future of continued financial viability.
In our daily life, there are, of course, many other everyday types of claims already upon us. Investors may have to meet specific liquidity needs or have a definite risk tolerance. Entrepreneurs to contend with intense competition and macro volatility. Policy makers’ immediate obligation may be to focus on the next round of elections. But perhaps, because in many ways the responsibility to climate change is broadly shared, net positive action is possible. Through legal frameworks, policy makers can set the pace for the phase-out of fossil fuels and provide a broader framework of incentives and support for hard-to-abate sectors. Energy majors can take a lead in energy transition ensuring their long-term success and viability by proactively pivoting their business model towards clean energy sources. Agricultural conglomerates can support the preservation of natural carbon sinks by embracing agroecology practices. As financiers and owners of companies, investors can help manage systemic risks via climate positive corporate practices through capital allocation and active stewardship. Consumers can demand better public transport and sustainable food economies.
The Kieger five guiding pillars
At Kieger, in identifying climate mitigation actions, we are guided by our five pillars that, in our view, underpin a sustainable energy transition: security, sufficiency, efficiency, flexibility, and circularity. These five pillars are interlinked and self-reinforcing, each enhancing the others to create a resilient, equitable, and renewable energy system that optimises resources, minimises waste, and ensures fair access for all.
Security refers to the reliable and uninterrupted availability of energy at affordable prices for generations to come.
- Sufficiency refers to reducing the primary demand itself.
- Energy efficiency means using less energy to perform the same task, reducing energy waste.
- Flexibility refers to the ability of the energy system to respond to changes in energy supply and demand.
- Circularity refers to minimising physical waste and making the most of the resources flowing in the energy system.
In helping to stabilise climate change and avoid the worst effects of global warming, the energy transition will create substantial economic value for society over the longer term, while also shaping new markets and creating new constellations of market leaders. Positive climate actions can be taken by policy makers, entrepreneurs, investors and consumers. Society as a whole stands to benefit. Climate change is a shared challenge and opportunity.
Written by Panagiota Balfousia, Head Sustainability at Kieger and Pietro Visetti, Sustainability Analyst at Kieger
