Nearly half of companies in the global bond market fail to meet climate standards

Just 53 per cent of companies in the global bond market are aligned with the 2C scenario needed to prevent catastrophic climate change, according to NN Investment Partners (NN IP).

The analysis shows that a significant number of companies have failed to put in place the measures needed to play their part in limiting the rise in global temperatures to 2C. This is worrying given the fact that the 1.5C scenario and net zero by 2050 should be where our ambitions lie. This is what happens when climate action is limited to gimmicks and marketing as opposed to a true change in a company’s business model.
 
The latest report by the United Nations’ Intergovernmental Panel on Climate Change warned that the world will fail to even limit global warming to 2 degrees Celsius unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions.
 
Isobel Edwards, Green Bond Analyst, NN Investment Partners:
“The extreme weather patterns seen across the world this year have been a stark reminder of the consequences of a relaxed attitude to decarbonisation and net zero ambitions. Some companies have made significant strides but overall, many are not far enough along to credibly claim that they are in line with the 1.5C scenario.
 
“More needs to be done to improve transparency around the extent of companies’ climate mitigation and adaptation and legislation should be introduced to speed up the transition to renewable energy and away from brown activities and assets. Companies should even be barred from issuing green bonds if they fail to meet true transition standards.”

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