Earth is 1.1 degrees Celcius warmer than pre-industrial levels and will get to 1.5°C much quicker than previously predicted, the United Nations climate change committee warned today, leading those in various parts of the investment industry to demand that much greater efforts are made to improve.
With the past five years having been the hottest on record since 1850, the UN Intergovernmental Panel on Climate Change (IPCC) published a report today saying the world is likely to reach the critical 1.5°C by 2041, and some of the changes are inevitable and “irreversible”.
World leaders previously agreed to fight to keep warming from reaching 1.5°C above pre-industrial levels to avoid worsening impacts on the planet, in what is known as the Paris Agreement.
Although human activity was found to unequivocally be causing rapid changes to the climate, including the rising sea level, melting polar ice and glaciers, heatwaves and wildfires (as currently seen in Greece, Turkey, Siberia and California), floods (as seen in Germany, North Korea, the UK) and droughts (currently affecting areas of the Amazon basin and Kazakhstan), even worsening catastrophe can be avoided if there is rapid action around the world, the IPCC scientists said.
The report from the IPCC, which is the world's foremost authority on climate change, said if changes are made the breach of the 1.5°C level could be temporary, and retreat by the end of the century, if sufficient changes are made, such as in the replacement of greenhouse-gas cause technology or planting forests to remove carbon dioxide from the atmosphere.
The global finance industry will prove "vital" in enabling the transition towards a low carbon economy, said Huw Davies, senior finance adviser at Make My Money Matter, adding that the £2.6trn invested in UK pensions making people's retirement savings "immensely powerful".
With less than three months until the 2021 United Nations Climate Change Conference in Glasgow, known as COP26, Davies said all pension schemes should commit to more "robust" net zero targets, including a 50% reduction in emissions by 2030, directing their financial clout towards cleaner, greener investments that will save our planet as we build back better from Covid-19.
The investment industry in particular needs to do much more, said Hector McNeil, co-CEO of HANetf, saying "the world is on fire and everybody needs to do more to tackle climate change".
He said at the moment "there is too much ‘hot air’ when it comes to what the industry is doing in relation to tackling climate change, but not enough action".
Gabriela Herculano, co-founder of the iClima Global Decarbonisation Enablers UCITS ETF, said: “The IPCC report is yet another clear warning that we are running out of time and must act fast, aggressively and in collaboration. The next few months ahead of COP26 are critical and give us an opportunity to focus on the key points that must be agreed on promptly."
Herculano called for "clear ban" on new coal power plants, with China, India, Indonesia, Japan and Vietnam still planning to build 600 new coal-fired power plants, and said global agreement and support was needed to decommission all existing coal plants and support renewable energy to be more price competitive in these countries so alternatives can be put in place.