Global asset manager Schroders has launched its own Climate Progress Dashboard which it has designed to provide investors “a unique insight” into the global progress towards limiting global warming to the 2°C target and the overall progress of the transition to a low-carbon global economy.
The Schroders Climate Progress Dashboard, however — based on all of the 12 indicators — currently predicts that we are on path for a temperature rise of 4°C.
Schroders is an international asset manager founded in 1804, currently responsible for £416.3 billion (€486.7 billion, $520.6 billion) of assets, as of 31 March this year. As with many large-scale asset managers these days, Schroders has taken the step to develop its own ability to provide reliable guidance and insight into the global transition to a low-carbon economy, and the need to ensure that investments do not impede the move to restrict global warming to 2°C above pre-industrial levels. The Climate Progress Dashboard provides investors with an insight into the current progress of transition and global warming, relying on long-term temperature predictions based on a framework of 12 indicators which span politics, business, technology progress, and energy. They are:
- Political Ambition
- Public Concern
- Political Action
- Corporate Planning
- Climate Finance
- Carbon Prices
- Electric Vehicles
- Renewable Capacity
- Carbon Capture & Storage Capacity
- Oil & Gas Investment
- Coal Production
- Oil & Gas Production
Currently, and somewhat disturbingly, the Dashboard predicts — based on all 12 of the indicators — that Earth is on course to see a temperature rise of 4°C above pre-industrial levels, and double the Paris Climate Agreement. Specifically, according to Schroders, while “global political action points to a 3.6°C temperature rise, current oil and gas production is running at a level consistent with temperature rises twice that level, highlighting the risks that remain inherent in energy companies.”
Unsurprisingly, Schroders also points to the recent decision by US President Donald Trump to withdraw his country from the Paris Climate Agreement.
“Climate change is a major challenge for the global economy, industries and financial markets,” said Andy Howard, Head of Sustainable Research, Schroders.
“However, too little attention is paid to developing the tools to manage the risks it presents. Understanding the speed of progress and the implications for investment values is critical.
“We developed the Climate Progress Dashboard to provide a unique perspective into the pace of change. It tracks trends in key progress markers towards decarbonisation. It provides an objective and transparent view of change and should help investors base decisions on the outcomes we are likely to see, rather than those we would like to see.
“An all-round view is important. There is no single measure of progress: reshaping the global economy as a carbon-light version of itself will require a range of markets to expand or contract rapidly in the coming decades.”
The Dashboard will undergo quarterly updates, providing a relatively current update of whether or not and how successfully the world is progressing towards the goals outlined in the Paris Climate Agreement.