Momentum from governments and companies to address the urgency of the climate crisis is gathering pace, with 2021 set to be a year of decisive change, research by Schroders has indicated.
The asset management firm's Climate Progress Dashboard (CPD) points to a long-run temperature rise of 3.7°C over pre-industrial levels, which is down from the 3.8°C rise forecast in Autumn 2020.
Although this represents incremental progress, and is well below the Paris Agreement's 1.5°C threshold, pressure on organisations to set net-zero emission goals and science-base targets has risen sharply over the last few years.
Just one of the CPD's 12 key indicators for climate progress deteriorated between the third and fourth quarter of last year. The rest were either unchanged or improved, with higher carbon prices the biggest driver of progress.
These have reached new highs in Europe, and are also similarly strong in the US, all as the UK prepares to host the COP26 climate summit in November.
“While the headline state of progress may be disappointing, pressure is building and 2021 could prove the year of decisive change," said Andy Howard, Schroders’ global head of sustainable investments.
“In the run up to COP26, the stream of announcements from policy makers and companies is set to gather pace, adding details and actions to the ambitions and aspirations already released.”
A summary of the CPD's changes between the third and fourth quarter of last year is shown below:
The recent progress is reflected in the fact that around two-thirds of global GDP and emissions are now generated in regions committed to decarbonisation.
However, despite these positive signs, Schroders warned that under one-tenth of institutional assets are managed by asset managers with net-zero ambitions.
“Now is not the time to be complacent,” Howard continued. “We are in a pivotal moment, and whilst some progress is being made, we need an aggressive and coordinated approach across policy makers, corporates and investors.”
Graphic credit: Schroders
Image credit: iStock
Author: Chris Seekings