Using the Paris Agreement on climate change as a long-term investment framework

Key takeaways

• The planet is on a trajectory for a temperature rise of between 2°C and 4°C by 2100, which would have devastating impacts on ecosystems and human health.
• Current global commitments remain gravely inadequate to achieve the climate goals of the Paris Agreement and would lead to a temperature increase of at least 3°C by the end of the century; however, there's still a window of opportunity to mitigate the most severe impacts of climate change.¹
• Long-term investors can’t afford to ignore these signals and significant tail risks. They have a vital part to play in ensuring corporations help meet these targets and, through doing so, can also enhance returns.
• Through the use of science-based targets, we believe achieving a net zero economy by 2050, in line with the Paris Agreement's goals, provides a suitable framework for investors seeking to align their portfolios with the overarching goal of curbing carbon emissions rapidly.