While the road to net zero may seem daunting for investors, the work being done by individual investors and through collaboration is rapidly making progress. Being open about the challenges and limitations of the methodologies we use is essential in terms of communicating honestly with clients and other stakeholders, as well as identifying the areas where further work is needed.
We see many opportunities arising from the rapid growth in investor commitment. The analysis of net zero alignment will support the deeper integration of climate risks and opportunities into investment portfolios, through the use of new data sets and analytical techniques. The emphasis on engagement coming out of the methodologies so far developed will add further impetus to investor stewardship, particularly beyond the Climate Action 100+ companies already under intensive focus. And efforts to address data gaps should support better company disclosure, building on progress made by the Task Force on Climate-related Financial Disclosures.
Implementing net zero is a huge challenge. But it’s also an exciting new journey for all of us. Being frank about the difficulties we encounter will add to credibility and consistency across the industry. It’s critical we get this right, and fast.
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