The transition to greener energy sources needs to be accelerated as quickly as possible, if the world is able to limit global temperature rise to below 2 degrees Celsius, a new report from S&P Global has said.
S&P Global’s report ‘Advancing the Transition‘, explores the key aspects that will be central to that transition, including evolving climate disclosure rules, steps that firms in the automotive business are taking to decarbonise, and the physical risks that climate change poses.
All hands on deck
“As the international community unites to discuss the climate crisis, the need for an all-hands-on-deck approach from business and policymakers across the globe couldn’t be more pressing,” said Dr. Richard Mattison, vice chair of S&P Global Sustainable1.
“Our comprehensive research underscores the dangers posed to nature and biodiversity, and the physical risks the current climate warming trajectory could have on markets, investors, and communities, while providing a roadmap for global leaders to collectively mitigate the negative impact of the global climate threat.”
Supply-side shocks
As the report notes, the global economy may face increasing supply-side shocks due to physical risks associated with a changing climate, particularly if investments in adaptation and resilience are not intensified.
It also states that the response of financial institutions to evolving regulations, net-zero GHG commitments, stakeholder pressures, and changing energy technologies will be key to determining oil and gas producers’ access to external financing amid decarbonisation efforts.
According to S&P Global, the Middle East is expected to witness an expansion of sustainable bond issuances, predominantly green, driven by increased climate change exposure, government initiatives, and corporate pledges.
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