LSEG sustainable investment research team
The next round of 2035 emissions targets – dubbed ‘NDCs 3.0’ and due early next year – are a critical juncture in global climate negotiations. These national commitments will be key to signalling what post-2030 emissions pathways G20 governments are envisaging.
They are also important for investors, as they will shape the trajectories of G20 economies in the 2030s – and determine transition and physical risk levels that companies will face over the coming decades.
Our latest edition of the Net Zero Atlas explores at which level each G20 country could set these targets, as well as refreshing our annual assessments of implied temperature rise associated with national climate policies and targets. We also provide an analysis of physical risk in 49 of the world’s largest cities.
Key findings from the report
- Hurricanes Milton and Helene which hit in September and October this year – leaving over 250 dead, driving millions from their homes and causing damages estimated at over US$100 bn in the US alone – are a stark reminder that climate change is already being felt.
- These impacts are materialising at only 1.3°C of warming. Our analysis projects global warming to reach 2.6°C under current policies, and would drive more frequent and destructive climate hazards, such as heatwaves and storms.
- The next round of national 2035 climate targets – dubbed ‘NDCs 3.0’ – will be a key milestone in global climate negotiations. They will be set by countries between COP29 in Azerbaijan in November and COP30 in Brazil next year.
- Our analysis suggests the level which each G20 country could set these targets in 3 scenarios. We show that emission cuts are almost certain to accelerate post-2030, but only the most ambitious scenario would limit warming to the well below 2 degrees Paris goal.
- These targets are also key for investors. They will shape the economic development pathways of major G20 economies in the 2030s, and determine transition risk levels for companies in key sectors.
- We also analysed 49 of the largest cities on the planet – home to almost 440 million people and responsible for almost 20% of global GDP – to assess the physical risks they would face in 2050.
- Our research finds that under a high emission scenario, the share of major cities with high-risk exposure would increase from less than one in five (18%) to almost one in two (47%).
Points of differentiation
For the fourth year in a row, this report builds on our existing sovereign climate methodologies, providing Implied Temperature Rise (ITR) assessments and tracking progress for country level climate commitments and policies in the G20.
LSEG has also systematically analysed potential ambition levels for forthcoming 2035 NDCs for G20 countries and the implied transition and physical risk for companies arising from each.
What does our research mean for you?
- This report provides investors with a wealth of data and insights on the transition and physical risks to which G20 countries are exposed.
- The report systematically evaluates how governments are responding both in terms of their emissions-reduction commitments and national adaptation strategies. It is critical for investors to grasp these challenges and understand how they are reshaping growth trajectories and asset valuations around the world.
See our previous Net Zero Reports
- COP28 Net Zero Atlas: The COP28 Net Zero Atlas
- COP27 Net Zero Atlas: The COP27 Net Zero Atlas
- COP26 Net Zero Atlas: The COP26 Net Zero Atlas
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