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Net-Zero Basics

The focus on net-zero is intensifying

clock 5 minute read

The world is running out of time to reach net-zero. At their current rate of emissions, the world’s publicly listed companies are on track to burn through their remaining share of the global emissions budget for keeping temperature rise to 1.5°C by 2026.

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Accelerating action to avert a climate catastrophe

Average global temperatures are very likely to rise 1.5°C above preindustrial levels by 2040 and continue rising for at least another decade, putting every region on a heading toward heatwaves, floods, drought and other extremes of weather, according to the IPCC’s latest report, which reflects the scientific consensus. The findings, which come as leaders across the world prepare to gather in in Glasgow for the COP26 climate summit, underscore the need for companies and capital-markets participants to redouble their efforts to reach net-zero across their businesses and portfolios.

The world’s publicly listed companies are emitting 11.1 billion tons of greenhouse gases collectively every year. That puts them on a trajectory to exceed their share of the global carbon budget as soon as 2026, according to the latest analysis by MSCI. The estimate reflects companies’ share of the global carbon budget, which is the total amount of greenhouse gas that we can put into the atmosphere without breaching a 1.5°C threshold.

We’re running out of time to reach net-zero emissions

“The economy is not independent of climate change.” Marco Tedesco, a researcher at Lamont-Doherty Earth Observatory of Columbia University, discusses why without action the challenge of confronting climate change will only steepen.

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The MSCI Net-Zero Tracker. A quarterly gauge of progress by the world’s public companies toward curbing climate risk.