Emissions from listed companies to "breach" climate target

Climate LargeGlobal listed companies are on track to breach the emissions limit to keep the temperature rise below 1.5°C in April 2026, warned MSCI Sustainability Institute.

Public companies are now projected to emit 11% more direct – or “Scope 1” - greenhouse gas emissions this year than in 2022. Over this decades emission need fall by 43% to limit the temperature rise to 1.5°C, said MSCI. 

According to the MSCI Net-Zero Tracker, decarbonisation progress is slowing amongst listed companies and the breach is three months earlier than MSCI projected in July 2023. 

However, the decarbonisation rate of national governments is projected to accelerate. 

Governments in 13 of the G20 nations are set to significantly increase their pace of decarbonisation this decade, rising to an average 4.5% a year from only 0.8% in the five years after the Paris Agreement. 

Also among the G20, nine countries will see their listed companies’ decarbonisation rates drop in the coming years. 

MSCI published the findings ahead of the COP28 climate change conference in Dubai.

The increase in emission by listed companies comes “despite meaningful steps by the listed sector to decarbonise that have seen the warming associated with their emissions drop by half a degree in two years”, from a projected 3°C in October 2021, to 2.5°C, based on MSCI’s ‘Implied Temperature Rise’ metric, the firm said.

In addition, more than one third (34%) have set a climate target that aspires to reach net-zero, a 50% increase from two years earlier. 

Linda-Eling Lee, head of the MSCI Sustainability Institute, said: “Despite progress, the world has not moved the needle enough to be on track to achieve 1.5°C. 

“Following a strong start, progress from listed companies in the remainder of the decade is set to slow now that the low hanging fruit has been picked. This makes it imperative to focus on policy innovation and technological advancements to help limit the cost of low-carbon energy.” 

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