Even with the current pledges the world still falls short of a well-below 2°C future

Even with the current pledges and targets, the world still falls short of a well-below 2°C future. While the COP process is setting the direction, lack of progress emphasises greater corporate and investor action is needed.

The agenda is becoming clear - there will be continued pressure and requirements for decarbonisation and climate transparency in the coming years, and corporates and investors need to be well-equipped with the strategy and tools for meeting these requirements.

Net-zero commitments from both corporates and investors have rapidly increased in recent years. Over c.21% of the largest 2,000 companies by sales (ECIU and Oxford Net Zero; 2021) or c.66% of the largest 167 global-emitting corporates (responsible for ~80% of global industrial emissions) (CA100+) have set net-zero commitments, while there is now over US$88tn in AUM behind the umbrella investor-focused Glasgow Financial Alliance for Net-Zero (GFANZ) initiative.

Despite ultimately aiming for the same goal in principle — net-zero emissions — how each company or investor reaches this target and over what time period could materially vary, creating comparability challenges and difficulty interpreting the implications a target and transition plan may have on a company or investor’s climate strategy.