The IPCC Special Report on Global Warming of 1.5°C requires the world to eliminate net greenhouse gas emissions by 2050 if it is to keep global warming to within 1.5oC of pre-industrial levels and avoid the worst impacts of climate change. Pursuing this target is consistent with the Paris Agreement and countries representing over 60% of global emissions have already announced net zero targets including the USA, EU, China, Canada, Japan and South Korea. In fact, all the G7 countries except Italy have announced net zero targets.
The IPCC report shows that anything less than net zero will leave the world and its economies exposed to severe risk. We believe investors who want the environment to be considered in their investment strategies will want those investments to be consistent with a net zero approach. Increasingly, investing in activities that are not consistent with net zero will be seen as out of mandate. We also believe that a significant number of investors want to invest in delivering a net zero solution not just complying with it. This is where active net zero is important.
The Institutional Investors Group on Climate Change (IIGCC) represents over 70 members with over US$16tr of assets. It sees two dimensions for investors to be considered in alignment with the temperature goals of the Paris Agreement.