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A stark choice between climate stability and global devastation is the constant drumbeat from a landmark report released today by the Intergovernmental Panel on ClimateChange (IPCC). Already, “widespread and rapid changes in the atmosphere, ocean, cryosphere , and biosphere have occurred,” the report says.
For decades, scientists have studied the risks of increasing greenhouse gas (GHG) emissions on the earth’s climate. The signals of early-stage climatechange are becoming unmistakably visible. As the recent Intergovernmental Panel on ClimateChange (IPCC) report on climate adaptation stated: “Global warming, reaching 1.5°C
Reasons are manifold but include better risk management, earlier identification of strandedassets, and the realisation that Paris Agreement goals are in jeopardy. In line with this, the pension fund has cut carbon emissions in its listed equity portfolio by more than half since 2010, representing a 65% decrease.
Transition plans should demonstrate alignment with 2030 decarbonisation targets, says UN Climate Envoy. In addition, institutions should have interim decarbonisation targets that are “consistent” with the 2030 target, set by the Intergovernmental Panel on ClimateChange , of reducing CO2 emissions by around 45% from 2010 levels.
To illustrate, BlackRock, the world’s leading investment firm, with more than $7 trillion worth of assets under management, has announced that climate will play a central role in investment considerations. Fossil fuels are at high risk of becoming strandedassets and PEs have a significant stake in the energy sector.
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