In the Race to Net Zero, Investors Cannot Only Focus on Their Portfolios When Setting Targets

In Brief:

Portfolio decarbonisation appears to be an easier way to align with Net Zero targets, but it can limit investment in the places that most need it, such as emerging markets.

With the responsible finance market buzzing about its role in mitigating climate change and risk, there is a divide among stakeholders about what “Net Zero” in finance should includeEmerging markets – which need USD 95 trillion for a Just Transition – are especially likely to fall out of favor in ‘portfolio decarbonisation’, which could dry up investment where it’s needed mostSome approaches to ‘portfolio decarbonisation’ are methodologically simpler than what the United Nations Framework Convention on Climate Change...