INTRODUCTION
The landmark Paris Agreement marked a sea change in the global fight against climate change. More than 190 countries are now committed to limiting global temperature rise and offsetting humanity’s contribution to it. Unfortunately, the current pledges and policies go nowhere near enough. Achieving net zero emissions by 2050 will require far more collective power than policymakers alone can provide. However, a combination of groundbreaking new datasets and index innovation is emerging, enabling investors to play an expanded role in achieving the goals of the Paris Agreement. Cutting-edge developments in Paris alignment, physical risks, and Scope 3 emissions data and the pioneering S&P PACTTM Indices (S&P Paris-Aligned & Climate Transition Indices) provide market participants with the option to align their portfolios with a scenario that may mitigate the most catastrophic climate impacts and at the same time, embark on the journey toward a net zero economy.
A DECLARATION OF IMPORTANCE: CLIMATE RISK IS REAL, BUT PARIS ALIGNMENT DATA CAN HELP US SOLVE IT
We hold these truths to be self-evident: that the climate is rapidly warming due to human activity; that if we don’t act soon, we’ll face certain dire consequences; and, that among these are loss of life, loss of habitat, and widespread destruction. We have a limited window to transition to a low-carbon economy and limit global temperature rise to well below 2°C (preferably 1.5°C) of warming since pre-industrial levels. Efforts are well underway thanks to the Paris Agreement and ratified commitments from at least 190 parties. Groundbreaking new datasets and index innovations are catalyzing an investor-led revolution: to reorient capital flows toward a net zero emissions trajectory by 2050.
Among these, are the S&P PACT Indices. Compliant with the EU Low Carbon Benchmark Regulation, these indices equip investors with the tools to align with the Paris Agreement and achieve other climate objectives, while remaining as close as possible to the underlying benchmark, targeting broad and diversified exposure. The sophistication of methodology and depth, breadth, and robustness of the underlying S&P Global data set these indices apart.
This is a summary of articles that originally appeared in The Quality Imperative, by S&P Global Sustainable1:
A Declaration of Importance: Climate Risk is Real, But Paris Aligned Data Can Help Us Solve It
Let’s Get Physical with S&P Trucost’s Physical Climate Risk Data
It’s All Within Scope, With S&P Global Scope 3 Data
They have been modified with permission to be republished by S&P Dow Jones Indices.
