Conclusion
We are confronted by what increasingly appears to be an ever-worsening environmental crisis. The IPCC report holds that extreme heat waves that previously only struck once every 50 years are now expected to happen once per decade because of global warming, while downpours and droughts have also become more frequent.11
In 2015, countries formally agreed to take joint action on climate change in the form of the Paris Agreement. They agreed to a warming limit of 2.0°C or preferably 1.5°C versus pre-industrial levels and that emissions must be net neutral by 2050 to achieve the warmer goal.
As highlighted in the IPCC’s report, even these efforts are falling short of halting the warming of the earth’s temperatures and causing drastic results.
Companies and municipalities that target credible GHG reduction efforts while working expeditiously toward risk adaptation and mitigation as well as long-term climate resiliency can contribute to efforts to transition our world to a low-carbon economy while sustaining the financial interests of their bond holders.
Engagement with bond issuers, SMEs, and industry organizations—like our work with Climate Action 100+--gives us opportunities to better understand bond risks, to identify issuers making authentic efforts to manage risks, and to contribute to their efforts by sharing knowledge we develop in our research efforts across the bond markets.
We take this responsibility as sustainable investors seriously and are committed to its continuation.
2. https://www.epa.gov/heatislands/heat-islands-and-equity
4. http://blogs.edf.org/climate411/files/2020/12/Climate-Risk-Electricity-Sector.pdf
5. https://iopscience.iop.org/article/10.1088/1748-9326/abb266
6. https://www.americanprogress.org/issues/green/reports/2019/08/01/473067/a-perfect-storm-2/
7. https://www.environmentalleader.com/2021/07/sustainability-bonds-to-hit-record-1t-in-2021/
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