31 July 2017

Schroders launched Climate Progress Dashboard to mitigate climate risks

Global asset manager Schroders has launched its own Climate Progress Dashboard designed to provide investors insights related to global progress towards achieving the 2°C global warming limit and towards the overall progress of the transition to a low-carbon economy.

The innovative dashboard estimates the long-term global temperature rise based on a set of 12 indicators, seen as key drivers and controls of climate change, covering politics, business, technological progress and energy.

The 12 indicators are:  Political Ambition, Public Concern, Political Action, Corporate Planning, Climate Finance, Carbon Prices, Electric Vehicles, Renewable Capacity, Carbon Capture & Storage Capacity, Oil & Gas Investment, Coal Production and Oil & Gas Production.

Currently, the Dashboard predicts that the planet is on course to a temperature rise of 4°C above pre-industrial levels, double the Paris Climate Agreement target.

According to Schroders, “while global political action points to a 3.6°C temperature rise, current oil and gas production is running at a level consistent with temperature rises twice that level, highlighting the risks that remain inherent in energy companies”.

Andy Howard, Head of Sustainable Research in Schroders said: “Climate change is a major challenge for the global economy, industries and financial market. However, too little attention is paid to developing the tools to manage the risks it presents. Understanding the speed of progress and the implications for investment values is critical”.

Mr. Howard also added: “We developed the Climate Progress Dashboard to provide a unique perspective into the pace of change. It tracks trends in key progress markers towards decarbonisation. It provides an objective and transparent view of change and should help investors base their decisions on the outcomes we are likely to see, rather than those we would like to see”.

Schroders will be updating the Dashboard on a quarterly basis providing a real-time reflection of how much progress has been made worldwide towards the Paris Agreement target and helping the company’s portfolio management teams to manage climate risks more effectively.

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