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Ice cubes, burning logs and the road to net zero: Episode 4
We believe that some of the best net-zero opportunities exist among companies whose current emissions would exclude them from low-carbon strategies but, due to their action on achieving carbon-reduction targets, indicate that they are on viable decarbonisation pathways.
We define these transition opportunities as ‘ice cubes’ because their progress on reducing emissions from today’s high levels to meet the target set by the Paris Agreement is helping to cool the economy and drive the transition forward.
In the final episode of our new podcast series on ice cubes, burning logs and the road to net zero, Head of Sustainability Research Thomas Höhne and Senior Sustainability Analyst Dominic Tighe discuss the future of the climate transition, in terms of what forces are driving the transition forwards and what needs to happen if we are to achieve our global climate goals and reach net zero in 2050.
Head of Sustainability Research Thomas Höhne: “The climate transition isn't just about investing in solar panels and wind turbines. This climate transition will have the scale of the industrial revolution and it has been unfolding at the pace of the digital one. It is going to affect every single sector, every single industry and every single allocation within our portfolios.
“The risks are not just concentrated among the energy companies. Any company in any high emitting sector that's failing to transition we believe will ultimately be highly adversely exposed.”
Senior Sustainability Analyst Dominic Tighe: “At present, it's still relatively rare to find companies that qualify as ice cubes. By our estimates, around 6% of the MSCI World index is currently aligned to a 1.5 degree trajectory and around 25% to a 2 degree trajectory. However, there is reason to believe that we're going to see an increasing number of ice cubes over time.”
To find out more about ice cubes, burning logs and the road to net zero, listen to the full episode below.
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