“Despite progress, the world has not moved the needle enough.”
So comments Linda-Eling Lee, founding director of the MSCI Sustainability Institute, in an MSCI press release from 14 November. The investment research firm now predicts that global listed companies will miss their emission reduction targets--those needed to limit the worldwide temperature rise to 1.5°C, estimated to be the maximum increase that would still avert the worst effects of climate change--as early as April 2026, three months sooner than the firm predicted in July 2023.
Indeed, the pace of decarbonisation by global listed companies is expected to slow down, now that obvious measures--“the low-hanging fruit,” says Lee--have already been taken. “This makes it imperative to focus on policy innovation and technological advancements to help limit the cost of low-carbon energy,” she adds.
These findings have been published ahead of the Cop28, the UN’s climate change conference, hosted this year in Dubai and with delegates from 200 countries expected to attend.
“The world remains massively off track,” comments UN secretary general António Guterres in a UN press release also from 14 November. He adds: “Global ambition stagnated over the past year and national climate plans are strikingly misaligned with the science.”
“Climate ambition supernova”
According to the MSCI report, greenhouse gas emissions from public listed companies are projected to be 11% higher this year compared to 2022. To meet the goal of limiting the rise to 1.5°C, this number would need to fall by a striking 43% by 2030. These figures appear to confirm Guterres’s remark that things are indeed “off track.”
Still, publicly listed companies haven’t done nothing. The proportion of global warming for which they are responsible has dropped by half a degree in two years, from 3°C in 2021 to 2.5°C now, the MSCI has found. There has also been a 50% increase in the number of public companies formally aspiring, via a climate target, to reach net-zero emissions: the proportion is now 34%.
In some places, governments are doing better than companies. From the G20--which comprises the European Union, the African Union and 19 additional nations--13 governments are projected by the MSCI report to actually accelerate their decarbonisation pace, hitting an average of a 4.5% reduction per year (compared to 0.8% in the five years after the Paris Agreement).
For Guterres, however, efforts worldwide are lacking. “Inch-by-inch progress will not do,” he says in the UN statement. “It is time for a climate ambition supernova in every country, city and sector.”