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Why This Matters: Most companies that are abiding by Paris Agreement goals were European — Arabesque’s research found that flagship indexes in Sweden, Germany, Switzerland, Finland and Japan have the largest number of listed companies on course to meet the 1.5 degrees Celsius target by 2050. The figure is lower for London’s FTSE 100 (UKX) and the US S&P 100 (OEX), and drops even further for Hong Kong’s Hang Seng Index and Australia’s ASX 50.
Arabesque emphasizes that the companies that comprise this 25% did so with relatively little government intervention, which, according to Kell, is “not a small thing.”
But this number has to improve in order for the world to avert climate catastrophe, and Arabesque argues that the government should create more incentives and restrictions that encourage companies to do better.
“This is a critical year,”Kell told CNN Business ,”Time is running out. We need to significantly step up, we have only a few years left.”
Taking Effective Climate Action: To analyze their data, Arabesque assigned companies in 14 of the world’s largest stock indexes a “temperature score” based on publicly reported emissions data between 2015 and 2019.
The study covered emissions generated directly and indirectly by companies, known as scope 1 and scope 2 emissions, but did not cover emissions from the products they sell, known as scope 3, due to difficulties obtaining this data.
President Biden’s Earth Day virtual summit could be an important catalyst for world leaders to consider taking stronger climate action, particularly in terms of economics. While governments around the world have included environmental projects in their coronavirus recovery plans, the International Energy Agency warned earlier this week of a surge in global carbon dioxide emissions as economies bounce back from the pandemic. Arabesque suggests that taxing companies for carbon pollution would be the most effective way for countries to reduce emissions.
“The imperative to decarbonize is increasingly urgent and it will be forced upon corporations ready or not,” Kell said. “Those that think ahead and anticipate a higher carbon price in the future will clearly be much better positioned.”
This past May, President Biden signed an executive order on climate-related financial risk, a cross-governmental plan that directs federal agencies to identify and mitigate financial risks presented by climate change to Americans, businesses, and the government itself. Progress on this order was made over the weekend when Treasury Secretary Janet Yellen announced that the Financial Stability […]
Why This Matters: Money talks. Investors are increasingly willing to walk away from deals like oil and gas drilling projects in the Arctic or investments in fossil fuel companies that refuse to change their business models.
American financiers are moving to divest from fossil fuels to help the U.S. reach net-zero carbon emissions, but some state Republicans are fighting back. Fifteen Republican state treasurers are now threatening to pull hundreds of billions of dollars worth of assets from large financial institutions if they move forward decarbonizing their portfolios per a letter they wrote to Climate Envoy John Kerry.
Why This Matters: Banks and financiers have invested billions in destructive environmental practices. Deforestation funded by the world’s largest banks increased in 2020 despite COVID-19.
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