5 climate must reads for the weekend

We keep our ear to the ground for the interesting stats, insights and discussion points you need to feel in the know.

1. Power-hungry AI

In 2022, data centers that power all computers worldwide, including clouds and search engines, used approximately 1 to 1.5% of the world’s electricity. However, new GenAI workloads are expected to spur a tripling of hyperscale data center capacity over the next six years. With even small data centres using approximately 25.5 million litres of water each year, addressing this challenge is vital. Data center operators are now deploying a variety of strategies to reduce cooling energy, from locating in colder regions or using waste heat to warm residential districts, to using alternative liquids to water. A few companies are even exploring putting data centers in space. AI development and deployment must demonstrate its contribution to environmental sustainability and remain centered on human values. Addressing the energy, resource and infrastructure dimensions of AI’s ramp up will be essential...

How can AI help us accelerate the pace of change the world needs?

2. Protecting nature isn’t just an environmental issue

More than four-fifths of Australia’s exports are highly dependent on nature. Agriculture, mining, energy, construction and real estate - sectors that rely on natural systems and nature-based inputs - employ around one in three of the Australian workforce. Despite being home to some of the world’s best examples of natural heritage, from the Great Barrier Reef to the Tasmanian Wilderness, and from the Ningaloo Coast to Uluru–Kata Tjuta National Park, Australia is not valuing or protecting its natural assets. More than 80% of Australian plants and mammals, and 45% of birds, are only found in Australia. But habitat loss and degradation, invasive species, resource extraction, pollution and climate change have had a cumulative impact. Consequently, Australia has the highest known rates of recent species extinctions in the world, accounting for 35% of recorded mammal extinctions. There is, however, a vast opportunity to protect and restore nature as we build a net zero economy. These two goals can, in fact, be mutually reinforcing. Here’s how...?

How can the net zero transition create a nature-positive advantage?

3. How to avoid ‘paper decarbonization’

One buzzword you may have heard this week from COP28, is ‘transition finance’. In a nutshell, this refers to the process of making capital available, to help high-emitting businesses and industries become more environmentally friendly. Why is it important? While an estimated US$1.1t was invested in the global energy transition in 2022, the world needs more than triple that amount - between US$3.5t and US$4t every year until 2050 - to get on track for net zero. Trillions of dollars will need to flow not just into green sectors, but also to transitional technologies and activities (which are often loosely defined given the wide range of industries, evolving innovations, changing regulations and inconsistencies in terminology). To move beyond setting goals and making declarations - and in doing so avoid “paper decarbonization” - here’s what financial institutions can do...

How to accelerate transition finance for net zero

4. Climate reporting is more than a tick-box exercise

Addressing and reflecting climate risk in reporting isn't just a tick-box exercise. Rather, it could actually present opportunities to thrive. A recent EY study found that when companies act on climate change, they realize above-expected returns across financial, customer, employee, societal and planetary value. And encouragingly, another recent EY study - the 2023 EY Climate Risk Barometer - shows that companies are investing more time and energy into improving what they disclose to stakeholders. However, the rate of improvement is not enough for measurable change. From a market perspective, Japan, South Korea, the Americas and most of Europe are all performing strongly and leading the way in terms of the quality of their disclosures. On the other hand, the Middle East and Southeast Asia have improved their performance compared with last year and positioned themselves for further progress but are still trailing behind. There are three actions that all companies should take urgently...?

How will understanding climate risk move you from ambition to action?

5. Progress is rarely linear??

Our energy system has transformed before, but not like this, and not this fast. It’s important to note that there is not just one energy transition, but multiple, unfolding at different paces and in different ways across the world. For example, some economies, including the UK, Europe and the US, have the policies, resources, capital and infrastructure to drive a faster transition. But in Asia and Africa, many governments are prioritizing economic growth and access to low-cost energy. Across the Middle East, oil still rules for now, but some nations, including Saudi Arabia, are pursuing ambitions to become global clean energy superpowers. And even within regions, or in a single country, the story can vary. China is leading the world in wind power - in late July, the world’s biggest wind turbine began operating off the coast of the Fujian province - but also still burns more coal than the rest of the world combined. EY modeling predicts change will accelerate over the next decade and beyond, but only if organizations seize momentum now...?

How bold action can accelerate the world’s multiple energy transitions

If you do one thing:?

Talk less, to be heard more.

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