If the IEA has it right, it means that there is no space for greenfield oil and gas projects in your investment portfolios. That really changed a lot of the discussions in the investment industry. It said that there is no space for new oil and gas in any net-zero scenario. Last year, it was a very important piece of the net-zero narrative. When the IEA published its first net-zero publication So, basically, time is running out and the clock is ticking a little too fast.ĪD In the context of the recent IEA discourse that finding offers an alternative perspective. What is worrying is that that's not a whole lot of time and it's two months earlier than we found just three months ago. We also know how much carbon budget is left to achieve 1.5☌ by 2050. We look at the state of emissions of listed issuers, and we know how much emissions they've put out last year. SV It's all about carbon budgets and how much budget is left. Why does MSCI say there are only 52 months left to align with 1.5☌? Seen in this context, the MSCI data serves as a reminder that momentum is arguably not enough and the WEO optimism should indeed be cautious.Īdditionally, Vanston’s reflections on offsets and biodiversity are pertinent given the weight of the debates currently underway at COP27 in Egypt as well as those expected at COP15 Biodiversity Summit in Canada later this year.ĪD The crux of the tracker is the ‘clock is ticking argument’. The WEO suggests that momentum seems to have accelerated. Clean energy investments, according to WEO 2022, are expected to reach $2tn by 2030. WEO 2022 forecasted fossil fuel emission peaks alongside positive growth expectations, for the first time since the industrial revolution. The tracker’s findings seem to contrast with the cautious optimism from the International Energy Agency’s (IEA) recently published World Energy Outlook (WEO) 2022. Not all targets are equally credible and assessing this is critical for net-zero investment decisions. Crucially, as Vanston argues, it is essential to examine the quality of targets. He suggests that while companies in upstream sectors have set targets following extensive engagement by institutional investors, not all sectors face similar expectations. Vanston discusses why the quantity of targets varies. Sylvain Vanston (SV), who coordinates the tracker, tells Net Zero Investor’s Atharva Deshmukh (AD) that companies are running out of time. Evidence from the latest edition of the tracker suggests that only 16% of listed companies have set targets that align with the elusive 1.5☌ goal and 51% have targets that align with future global warming in excess of 2☌. MSCI’s Net-Zero Tracker investigates the latest trends in corporate target-setting on a quarterly basis. As the adage goes: without a goal, you cannot score. In other words, to align with ambitious climate objectives, it is imperative that corporates not only report emissions but also commit to reducing them in line with the objective. Measuring progress is almost as critical as aiming for it when it comes to decarbonisation.
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