None of the G7 stock indices meet climate targets
Expectations are running high ahead of the G7 leaders’ summit in London. Stock market investors will be looking for any details regarding the possible opening of trans-Atlantic air travel.
None of the large stock market indices of the G7 economies is aligned today with the emission reduction targets included in the Paris Agreement. That demands more commitments from the companies that form them in this area.
The CDP Worldwide and UN Global Compact prepared the report. It points out that, on average, the companies included in these indices are on a trajectory that would raise the global average temperature 2.95 degrees Celsius above pre-industrial levels by the end of the century. So it’s far from the goal of 2 degrees and the recommendation of 1.5 degrees of that pact.
Aligning finance with the Paris Agreement
Four of the seven indexes analyzed are, in fact, on a dangerous trajectory of 3 degrees Celsius or more. It is led by the Canadian S&P TSX 60 and the British FTSE 100, both with significant contributions from the fossil fuel industry.
According to the study, the US S&P 500, Italian FTSE MIB, French CAC 40, or Japan’s Nikkei 225 are also not meeting the targets.
German DAX 30 is the one that comes closest however fails to achieve it.
More than 70% of its companies committed to emission reduction targets.
Those responsible for the report emphasize that it is about the companies that make up these indices. Not to mention the billions of dollars that flow to these values.
For this reason, CDP and the UN demand that financial institutions also align their investment portfolios with the objectives of the Paris Agreement.
Lila Karbassi, head of programs for the UN Global Compact, stated that
G7 companies have the potential to create an effect of positive change throughout the global economy. This report stresses the urgent need for markets and investors to meet the goals of the Paris Agreement.
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