The facts are clear

The scientific consensus could hardly be louder or clearer. Without radical changes to how we live, humanity faces a potential climate catastrophe during our or our children’s lifetimes. Greenhouse gas emissions are already causing extreme climate and weather events, with devastating consequences for people and planet alike. The growing frequency and severity of floods, fires, droughts, polluted air and water scarcity are among the most obvious.

Within the next twenty years, the rise in the Earth’s surface temperatures is set to reach 1.5°C (2.7°F) above pre-industrial levels.¹⁸  However, there is an acute risk of even greater increases. A 2°C rise, for example, would likely see many more extreme heat events, higher sea levels, worse losses of plants and wildlife, lower crop yields, near-total coral reef destruction and shrinking marine fish stocks. The impact upon economic activity and human life would be severe, with some of the world’s most vulnerable people suffering most.

More focus and more action

As such, the focus upon climate change is now greater than ever before, with many citizens, governments and companies convinced of the need for action. The UN’s 26th climate change conference, known as “COP26” in November 2021 saw further pledges to strive for net-zero carbon emissions, methane emission reduction, halting and reversing deforestation and the phasedown of coal. If enforced, the International Energy Agency estimates that such measures could allow global warming to be limited to 1.8°C. But translating pledges into results will require considerable commitment, coordination and capital.

Increasingly, actions are indeed matching words. Governments across the world are boosting support for vital measures to reduce emissions. The latest initiatives form an important part of some nations’ post-pandemic economic recovery and job creation plans. The US, China, the European Union and Japan are among those poised to spend trillions on creating and upgrading their sustainable infrastructure, including renewable energy production.

Greening is an unstoppable necessity

Given its importance to the future of humanity – and the legislative, market and social momentum behind it – we consider the transition to a more sustainable existence to be an unstoppable trend. We presented our case for ongoing advances in green energy innovation, electrification and efficiency in The future of energy in Outlook 2020 and Greening the world in Outlook 2021. And we recommended long-term portfolio exposure to the transition’s potential beneficiaries, including electric carmakers, battery makers, infrastructure suppliers and installers, and smart appliance makers.