Insights

With the publication of its ‘Synthesis Report’, the Intergovernmental Panel on Climate Change (IPCC) – the UN-convened body responsible for climate science – closed its “6th Assessment Cycle (AR6)”1. The assessment is the result of nearly a decade of research and collaboration by the world’s leading

climate scientist, economist, and academics. It provides the most comprehensive update on climate science, mitigation, and adaption since the release of AR5 in 2014.

 

The findings from AR6 will form the backbone of climate policy and will inevitably shape the framework that the financial sector operates within. Hence, any investors interested in manoeuvring the complex climate space needs to be cognisant of AR6’s key findings. All the reports are ratified at international plenary negotiations in which governments formally approve the summary for policymakers, ensuring high credibility in national and international policymaking.

 

We provide key messages from the AR6 cycle that are relevant to investment management. The message of urgency is clear; we are not on track to achieve the Paris Agreement goals, climate finance flows need to grow immensely, investors must adequality price climate-risks, and the often-held perception that financial climate risks are a “future”- and not a “now”- problem is firmly dispelled. There is also a clear message of opportunity – that investments in mitigation and adaptation are likely to be a major economic growth area in years to come, opening up new and expanding areas for investment. 

Where are we now?
Where are we heading?
What can we do?
5 April 2023
Albertine Pegrun Haram
Albertine Pegrum-Haram
Climate Change Analyst
Key topics
Related topics
Listen on Stitcher badge
Key topics
Related topics

1Along with three special reports, the IPCC released three major reports as part of AR6: ‘The Physical Science Basis’ (June 2021); In March 2022, “Impacts, Adaptation and Vulnerability” and ‘Mitigation of Climate Change’, released in April 2022. The final “Synthesis Report” summarised the key findings and messages of the complete AR6 assessment cycle.

2The Cross-Working Group Box on page 2507, ‘estimating global economic impacts from climate change’ summarises the work and main findings on aggregate economic damage.

3The IPCC measures sea level rise relative to 1995-2014.

4Defined as degrees of warming relative to preindustrial levels (1850-1900)

5Under B.1 (Possible Climate Futures), see table SPM.1, of the “Physical Science Basis”

6The World Meteorological Organization states that there is a 50:50 chance that temperatures could average 1.5°C or above in one of the next five years. This, however, should not be confused with “exceeding” 1.5°C or “breaching the Paris target”. The IPCC defines the ‘threshold-crossing time’ as the midpoint of the first 20-year period when the global surface air temperature averages higher than that target.

7For a deep dive into the debate and consequences of 1.5C this (16/03) Financial Times editorial is useful.

8Note: the report was published pre COP27, however this should not alter the findings significantly as new targets were scarce.

Important information

© 2022 Columbia Threadneedle Investments

For professional investors.

For marketing purposes. Your capital is at risk. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.
Not all services, products and strategies are offered by all entities of the group. Awards or ratings may not apply to all entities of the group.

This material should not be considered as an offer, solicitation, advice, or an investment recommendation. This communication is valid at the date of publication and may be subject to change without notice. Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness.

In the UK: Issued by Threadneedle Asset Management Limited, No. 573204 and/or Columbia Threadneedle Management Limited, No. 517895, both registered in England and Wales and authorised and regulated in the UK by the Financial Conduct Authority.

Related Insights

12 November 2024

Vicki Bakhshi

Director, Responsible Investment

COP29: Will it deliver on climate finance?

With mitigation and adaptation needs running into hundreds of billions of dollars, and public finances stretched, the private sector will need to deliver much of the necessary ‘climate finance’
17 October 2024

Natalia Luna

Senior Thematic Investment Analyst, Global Research

Power hungry AI - investment implications in the era of energy transition

Understanding the options for power provision and assessing the investment opportunities resulting from AI’s thirst for energy.
Read time - 2 min
8 October 2024

The climate risk ‘hot potato’– which sector will be left with burnt fingers?

A secure and consistent supply of critical minerals is fundamental to the energy transition and to achieving net-zero, but demand is putting pressure on supply chains and costs, and risks polarising sentiment around the energy transition.
12 November 2024

Fixed Income Desk

In Credit - Weekly Snapshot

In Credit Weekly Snapshot – November 2024

Our fixed income team provide their weekly snapshot of market events.
12 November 2024

Vicki Bakhshi

Director, Responsible Investment

COP29: Will it deliver on climate finance?

With mitigation and adaptation needs running into hundreds of billions of dollars, and public finances stretched, the private sector will need to deliver much of the necessary ‘climate finance’
11 November 2024

Paul Doyle

Head of Europe ex-UK Equities

European reform must wait as the US continues to advance

The continent is struggling with competitiveness and needs to cut interest rates faster – but even that may not be enough.
true
true

Important information

© 2022 Columbia Threadneedle Investments

For professional investors.

For marketing purposes. Your capital is at risk. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.
Not all services, products and strategies are offered by all entities of the group. Awards or ratings may not apply to all entities of the group.

This material should not be considered as an offer, solicitation, advice, or an investment recommendation. This communication is valid at the date of publication and may be subject to change without notice. Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness.

In the UK: Issued by Threadneedle Asset Management Limited, No. 573204 and/or Columbia Threadneedle Management Limited, No. 517895, both registered in England and Wales and authorised and regulated in the UK by the Financial Conduct Authority.

You may also like

Investment approach

Teamwork defines us and is fundamental to our investment approach, which is structured to facilitate the generation, assessment and implementation of good, strong investment ideas for our portfolios.

Funds and Prices

Columbia Threadneedle Investments has a comprehensive range of investment funds catering for a broad range of objectives.

Our Capabilities

We offer a broad range of actively managed investment strategies and solutions covering global, regional and domestic markets and asset classes.

Thank you. You can now visit your preference centre to choose which insights you would like to receive by email.

To view and control which insights you receive from us by email, please visit your preference centre.

Woman listens to music through headphones
Play Video

CT Property Trust- Fund Manager Update

Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium