“Code red for humanity” warned headlines around the world in August last year, quoting UN Secretary-General António Guterres when the Intergovernmental Panel on Climate Change published part one of its assessment report.
That concluded that warming of 1.5°C above pre-industrial levels will be reached by 2040. Part two issued this week makes even graver reading.
Guterres has described it as an “atlas of human suffering and a damning indictment of failed climate leadership”. He says the world’s biggest polluters are guilty of arson on our only home.
Unsurprisingly, however, tragic events unfolding in Ukraine have taken priority in the news in recent days.
But it is hard to ignore a report that highlights ecosystem collapse, species extinction, deadly heatwaves and floods among “dangerous and widespread disruptions” that some regions are already experiencing.
Discover more by visiting Schroders’ insights or click the links below:
– Follow: Live blog: what does Russia’s invasion of Ukraine mean for markets
– Listen: Should you always believe in gold?
– Watch: Why now’s not the time to be making big bet
“Clobbered” by climate change: what does the latest update reveal?
Part two includes an assessment of the impacts – current and future – of climate change on ecosystems, biodiversity and human communities at global and regional levels.
It concludes that human-induced climate change is causing dangerous and widespread disruption in nature and affecting billions of lives all over the world – and that it is the populations and regional ecosystems that are least able to cope being hit hardest.
As much as 40% of the world population, or a staggering 3.5 billion people, are “highly vulnerable” to climate impacts. That includes one in three who are exposed to deadly heat stress, with that expected to reach 50% or even 75% by the end of the century.
Meanwhile, “substantive” falls in crop production are expected in Europe this century. Africa has already suffered a 34% plunge in agricultural productivity since 1961 due to climate change, despite being a minimal contributor to global warming.
The “existential threat” to communities from flooding is expected to increase ten-fold by 2100.
There is a vicious circle of increased wildfires contributing to global warming, with the frequency of devastating fires accelerating as degrees of temperature are added.
Some of the effects of global warming in certain regions mean that ecosystems are already at the point of no return.
In order to mitigate this, the IPCC calls for restoration of degraded ecosystems and conservation of 30-50% of land, freshwater and ocean habitats.
It says investments in adaptation, adjustments in ecological, social, or economic systems in response to climate change, do work and cities are crucial to the solution.
Andy Howard, Global Head of Sustainable Investment, says the latest IPCC update “puts even more pressure on world leaders to take steps to accelerate the energy transition ahead of the COP27 climate summit in Egypt in November”.
“Evidence that climate change is wreaking havoc is unavoidable and calls for action are getting louder,” he says. “This ‘atlas’ of examples of impacts on people and planet shows that global warming is already having consequences that we cannot ignore.”
He continues: “Schroders’ own Climate Progress Dashboard consistently gives an alarming result. It currently points to a long-run temperature rise of 3.3°C above pre-industrial levels. Statements of ambition are helpful, but action needs to follow that ambition.
“We can, however, take hope from signs that investment in adaptation work, and a growing recognition of the importance of nature. Asset managers have a key role to play here too.
“The Natural Capital Investment Alliance launched last year by Prince Charles is one example of how the industry can help in this journey. Schroders is a member of this group, which all have, or will have, investment vehicles that help channel capital into nature-focused projects.”
After this week’s update on the effects of climate change, two more parts to the IPCC report will be published between now and October ahead of the COP27 climate summit in Egypt the following month.
Our climate change goals
Schroders’ goals for reducing greenhouse gas emissions from our investment activities and business operations have been formally validated by the Science Based Targets initiative (SBTi).
The SBTi is an organisation working to define and promote best practice in emissions reductions and net-zero targets in line with climate science.
It aims to encourage companies to align their business models with the objective set out in the Paris Agreement, to limit global warming to 1.5°C compared to pre-industrial levels.
Our dedication to achieving our reduction goals is paramount to our business strategy. We believe that in tomorrow’s investment world, profits and planet are interlinked.
Schroders’ full Climate Transition Action Plan can be found on the Corporate Responsibility section of our website.
Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change. To the extent that you are in North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc and SEC registered adviser providing asset management products and services to clients in the US and Canada. For all other users, this content is issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.