Earth getting hotter, people getting sicker

By Kim Sung-woo

Last April, the publication Nature published some notable research. Due to climate change, animals are traveling outside of their original habitats more frequently, which is expected to create 123,000 new contacts with different species and 4,600 cases of pathogen sharing among mammals by 2070. In other words, as the Earth gets hotter, more animals come into contact with each other, which is likely to lead to one more case of pathogen sharing every three to four days.

It is particularly alarming that 90 percent of the animals that will be exposed to inter-species contacts are bats, as a few of the most devastating viruses ― SARS, MERS, and COVID-19 ― are known to have been transferred from bats. The researchers noted that there is no question that we are facing a hotter and more painful future.

In fact, this is not a future problem but more of a current problem we are facing. According to a recent paper published in August on Nature Climate Change, the number of sick people has increased because we are living in an environment where pathogens are transferred to humans faster than before, due to the abnormal weather.

Unusual weather conditions (e.g., floods, heat waves and droughts) have spread more widely ― 58 percent of 375 infectious diseases such as cholera and anthrax. The author said that this is taking place right now and is not about the future. Not only human beings but also the Earth is sharing the pain.

According to the World Meteorological Organization (WMO)'s "WMO Statement on the State of the Global Climate in 2021" released in May, shows that major indicators such as greenhouse gas concentrations and sea water temperatures all hit record highs last year, and the period from 2015 to 2021 recorded the hottest seven years since the observation.

The annual climate state report released by the U.S. National Oceanic and Atmospheric Administration (NOAA) in August also warned that there will be a series of scientific evidence that there are no signs of a slowdown in climate change, stressing that we need to address the climate crisis now, not in the future.

How serious are we when it comes to climate change? When surveyed, people have always said that climate change is a serious problem. In reality, however, a climate issue is de-prioritized over other "urgent" issues. In May, local daily Segye Ilbo asked 1,012 people aged 19 or older in Korea about which tasks need to be addressed within the next year. An overwhelming number of respondents picked "economic growth," and climate change was placed in the less important category.

The result was identical to a survey conducted three years ago. Nevertheless, when asked which tasks need to be addressed within the next 10 years, people answered climate change as the third priority following the low birthrate and aging society and economic growth. Only after extending the time horizon to 30 years, did climate change top the list. People are concerned about climate risks but only as long-term risks.

Is it possible to connect the perception of long-term, future risks to a more immediate response? One example is the remuneration systems recently adopted by multinational corporations to incentivize their CEOs and directors to take action with respect to long-term issues. Take the example of Starbucks. Kevin Johnson, the CEO, received a $2 million bonus in 2021 for carrying out eco-friendly business activities, including reducing plastics and greenhouse gas emissions from the company's supply chain.

Investors are not an exception. In January, Allianz Global Investors, a global asset management company, announced that starting from its 2023 shareholders' meeting, the asset manager would vote against the remuneration policy of large European companies that do not reflect ESG Key Performance Indicators (KPI) in their directors' and management's remuneration.

In the "Principles for the effective management and supervision of climate-related financial risks" announced in June, the Basel Committee, an international banking supervisory body, recommended that climate change be considered in executive compensation. Large Korean companies such as Hyundai Motors and SK have also begun to link ESG grades or climate change response to the evaluation of their management.

A more meticulous compensation system can turn the lingering perception of climate change as a future risk into a motivation to act right now. That is, climate change is not homework for a CEO of multiple generations after but an emergency that requires the present CEO's immediate attention. A compensation system that encourages this type of thinking is useful in corporate sectors as well as across our society.

Let's be honest. We all pledge to fight against the climate crisis, but we are not being proactive because, at the end of the day, we are thinking that we will not be on this Earth when it is in real trouble. This belief is completely misplaced. The Earth is already in the midst of the climate crisis, and people are already experiencing a hotter climate and more widespread diseases.

Even if we do not exist on this Earth in the future, the next generation will. This is why there is a dire need for a corporate compensation system, which ties people's present incentives to address ongoing and future risks not only in C-suites but in every corner of our society.

Kim Sung-woo is the head of Environment & Energy Research Institute at Kim & Chang.