Schroders Climate Progress Dashboard update: Will Covid-19 prove a pivotal moment for climate change?
The devastating effects of Covid-19 pandemic have had a short-term impact on carbon emissions, but not enough to move Schroders’ Climate Progress Dashboard which remains unchanged in implying a long-term temperature rise of 3.9°C in its latest quarterly update.
Schroders Climate Progress Dashboard
Source: Schroders analysis based on industry sources. Based on data available as at Q1 2020.
Launched in 2017, the Climate Progress Dashboard provides Schroders’ analysts, fund managers and clients with an insight into the progress governments and industries across the world are making towards meeting the 2°C temperature rise target set by the Paris Agreement in 2015.
In the first quarter of this year as the world battled the pandemic, industry and transport which create more than one third of global greenhouse gas emissions have virtually ground to a halt. It looks likely that 2020 will mark the fourth year in three decades in which global emissions fall, and it will quite possibly be the largest reduction ever seen.
However, Andrew Howard, Head of Sustainable Research at Schroders, cautions that these short-term effects do not necessarily equate to tangible long-term change.
He comments: “The headline temperature rise implied by the dozen drivers examined points to a long run temperature rise of 3.9 degrees over pre-industrial levels, unchanged from last quarter’s reading. We have seen short-term changes in some drivers, whether these will be sustained is another question.
“During the 2008-09 Global Financial Crisis we saw a 1.3% reduction in emissions only for them to bounce back by almost 6% in 2010 as injections of fiscal support across major economies kick-started economic activity. We do not want this to happen again and as policy makers, businesses and governments begin to plan the economic and societal recovery from the pandemic, this could be the inflection point for climate change to accelerate the transition to a low carbon economy.
“Economies across the globe will need fiscal support and some policy makers, for instance EU leaders have agreed that the region’s economic recovery plan will be consistent with its green transition commitment. Whether others follow suit, or how stringent their criteria prove, will become clearer as commitments turn into action.”
In a further indication of its commitment to creating a sustainable economy, Schroders has joined the United Nations Global Compact, the world’s largest corporate sustainability initiative. This follows the A+ rating for overall strategy and governance in relation to sustainable investment awarded to Schroders in 2019 for the fifth year running by the Principles for Responsible Investment (PRI), an influential United Nations-backed global investor initiative.
In October 2019, Schroders announced that its corporate revolving credit facility has been converted into an ESG-linked facility, an innovative move underlining the firm’s commitment to sustainability from a corporate, as well as investment, perspective.
Jessica Ground, Global Head of Stewardship at Schroders, said: “The integration of sustainability is at the very core of Schroders. We look forward to working collaboratively with the UN Global Compact to catalyse change and use our influence to engage with companies and policymakers to create a fairer society for all.”
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