Why net-zero matters for investors
Climate change is the single greatest challenge humankind has faced and its consequences are already all too apparent. Flooding, fires and drought are harbingers of the dislocation to come if the planet doesn’t slash emissions of greenhouse gases to reduce warming.
- What COP26 may mean for institutional investors
- How renewable energy is stranding coal
- Coal consumption is on track to rise in 2021
- Why banks are critical to reaching global climate goals
- The latest emissions gap report shows the need for bold action
- Investors may need all the tools at their disposal
- Why net-zero matters for investors
- The focus on net-zero is intensifying
- How investors can drive the transition to net-zero
- How net-zero differs from zero carbon emissions
- Estimated costs and opportunities of climate change
- The tie between climate change and biodiversity
What is net-zero?
Averting a climate disaster will demand a rebuilding of the global economy from one that relies overwhelmingly on fossil fuels for energy to an economy that takes as much carbon out of the atmosphere as it puts in. In short, it will require reducing greenhouse gas emissions to net-zero. The 2015 Paris Agreement set a goal of preventing the worst effects of climate change by limiting global temperature rise to well below 2 degrees Celsius (2°C), preferably 1.5°C , above preindustrial levels by the end of the century. But absent large-scale reductions in emissions, average global temperatures are very likely to exceed the 1.5°C threshold by 2040 and continue to rise for at least a decade thereafter, according to the latest report by the U.N. Intergovernmental Panel on Climate Change (IPCC). Net-zero may on the surface seem straightforward. But companies, countries and organizations and institutions across society need to do the work of aligning their emissions with the global goal. That’s where the details start to matter.