The Role of Finance in the Transition to Net Zero

To halve global emissions by 2030 and reach net zero by 2050, global decarbonisation must reach an annual rate of 12.9% - five times that achieved between 2020 and 2021, according to a report by PwC. Governments, industries and regulators are under increasing pressure to reform their models and practices to ensure that achieving global climate goals remains feasible. The UN Intergovernmental Panel on Climate Change recently warned that the world faces multiple unavoidable climate hazards over the next two decades, even if global warming is successfully limited to +1.5°C.[i] Even temporarily exceeding this warming level could result in “additional severe impacts, some of which will be irreversible. Risks for society will increase, including to infrastructure and low-lying coastal settlements”. With the power to engage business leaders and drive sustainable long-term development, the finance industry undoubtedly has a key role to play in the transition to net zero. As the industry becomes increasingly regulated and growth in digital banking gives rise to a wave of first-time investors, advisors and portfolio managers need to adapt their practices to ensure they can achieve the transparency and authenticity of service needed. In Episode 2 of the Investors’ ESG Guidebook: The Road to Equitable and Sustainable Growth, leaders from across the responsible investment industry share their insights on the shifting role of finance in the transition to net zero and explore the first steps you can take to be part of the movement. Topics for discussion include: - How the global economy is responding and adapting to the transition to net zero - How can investors play a role in the ‘Just Transition’ - From shareholder profit to stakeholder prosperity: Understanding finance’s new objective - Leading the way: How asset managers are adapting to optimise their position in the green economy. [i] Press release | Climate Change 2022: Impacts, Adaptation and Vulnerability (ipcc.ch)