The long-term increase in temperature the world is currently heading towards has fallen again, albeit at a slow pace, following the commitments made at last year’s COP26 conference in Glasgow, Schroders Climate Progress Dashboard has found.
Current activity indicates a global rise in temperature of 3.3°C as of 31 December 2021, down from 3.4°C recorded at the end of June 2020 and the lowest reading since the dashboard was launched by Schroders. Indeed, in Q1 2017, the dashboard was tracking a 4.2°C temperature rise above pre-industrial levels.
The positive momentum since the last update was supported by the volume of climate commitments made in the run up to and during COP 26. In addition, and more significantly, oil and gas sectors globally have continued curtailing their investment in new capacity, while carbon prices in Europe continue to reach new records.
Andy Howard, Schroders Global Head of Sustainable Investments, commented:
“The 26th Conference of the Parties – the annual global climate event bringing together political leaders to set a roadmap for global climate action – provided neither the step forward we had hoped for, nor the setback we’d feared. India in particular has established a net zero target, albeit its pace is contingent on developed economies providing capital to emerging counterparts to ease and facilitate that transition.
“Overall, political targets and aspirations are relatively aggressive but policies to deliver those targets are less developed and less audacious.
“Most encouragingly however, industry-wide investment in new oil and gas capacity has continued to slide. Fossil fuel producers are in the cross hairs of climate campaigners and policymakers, as are the financial services companies that provide capital to them. That constraint has been the major driver of the lower long-run temperature rise implied by climate action since our last update.
“All in all, there is much further to go to align the actions we see across all of the stakeholders, industries and social groups that will play key roles in driving decarbonisation. Progress toward the goals agreed in Paris in 2015 continues, albeit slowly.”
Launched in 2017, the Climate Progress Dashboard provides Schroders analysts, fund managers and clients with an insight into the progress governments and industries across the world are making towards meeting the 2°C temperature rise limit set by the Paris Agreement.
Schroders Climate Progress Dashboard: