Climate Progress Dashboard - Financial Professionals

Climate change – navigating risks and opportunities

Climate change is becoming a defining theme of the global economy.

Rigorous strategies are needed for investors to manage risks and take opportunities during the expected transition to a decarbonised world. Our research and tools focus on providing new thinking and solutions to help guide investors as the impact of climate change unfolds.

Climate Progress Dashboard

Carbon Value at Risk

Fossil Fuel Producers

Keeping track of activity: the Climate Progress Dashboard

Our Climate Progress Dashboard monitors 12 indicators* to show the progress being made towards decarbonizing the global economy. It compares projections made by international organizations to estimate the temperature change implied by the progress in each area. Together, they suggest we are heading for a rise closer to 4° than the 2° commitment global leaders made in Paris in 2015.

Introducing the dashboard Q4 2018 update Q3 2018 update

*Temperatures are measured in degrees celsius. Data as of December 28, 2018.

3.9°

Aggregate implied temperature rise

Political change

Business and finance

Technology solution

Entrenched industry

Political ambition

3.0°

Tracks the level of political ambition expressed through Intended Nationally Determined Contributions (INDCs). Those INDCs represent the targets individual countries have set to contain greenhouse gas emissions. The NGO Climate Action Tracker tracks individual countries' commitments and the temperature rises they imply, which analysis we use here. We calculate historical data from reported national commitments in past years

Source: Climate Action Tracker, UNFCC and Schroders analysis, latest data available as at 22 December 2018

Corporate planning

3.6°

Tracks the strength of corporate action to align their business strategies with a less carbon-intensive global economy. We track the average CDP Performance Scores for large global companies. The scores combine analysis of a range of performance, policy and target measures based on companies' responses to CDP's survey. CDP, formerly the Carbon Disclosure Project, is a non-profit organisation that reports on the environmental impact of companies.

Source: CDP latest data available as at 22 December 2018

Electric vehicles

3.4°

Meeting long-term climate commitments will probably require a significant rise in electric vehicle use. Our analysis compares the global stock of plug in electric vehicles (using annual sales data and assuming an average eight-year vehicle life) to projections the IEA (International Energy Agency) has made for electric vehicle use under a range of temperature scenarios.

Source: IEA and Schroders estimates & analysis, latest data available as at 22 December 2018

Oil & gas investment

4.6°

Compares the amounts being invested in production (capital expenditure as a percentage of a company’s assets) by listed global oil & gas companies compared to the required production growth over the next decade. Higher production growth would add to rising temperatures. The blue line needs to fall to the green line to meet the 2 degree target.

Source: Thomson Reuters, IEA, and Schroders analysis, latest data available as at 22 December 2018

Public concern

3.4°

Tracks the level of public concern over climate change. It uses the percentage of respondents to Gallup's annual global survey of major countries which identify climate change as a concern. We assume that 90% concern equates to 2 degree temperature rise and 10% concern level to 6 degrees.

Source: Gallup, and Schroders estimates & analysis, latest data available as at 22 December

Climate finance

4.5°

Decarbonising the global economy will require significant investment in clean energy infrastructure, a large proportion of which will depend on the availability of finance focused on those environmental solutions. The temperature pathways are based on the amount of climate finance identified in annual reports by the UN Environment Program compared to the estimated amounts needed, according to Bloomberg New Energy Finance.

Source: UNEP, Bloomberg New Energy Finance and Schroders analysis, latest data available as at 22 December

Renewable capacity

2.9°

Compares the level of renewables capacity (excluding hydro) available every year against the levels the IEA estimates will be needed to contain temperature rises to different levels. We have used the BP Statistical Review as a source of renewable energy capacity. Containing and stabilising global temperature rises will probably ultimately require a complete transition away from fossil fuels, hence the need for growth in renewable use.

Source: IEA, BP Statistical Review and Schroders analysis, latest data available as at 22 December

Fossil fuel reserves

4.4°

Compares the growth in oil, gas and coal reserve additions (based on the energy contained in each fuel) to the pace of growth in fossil fuel demand implied by the IEA’s temperature scenarios. Our analysis examines the growth in reserves over the previous years, plus that year’s production, to gauge the volume of reserves added during the year. By comparing that reserve growth to the level of demand growth implied in each scenario, we estimate the pace of future growth consistent with the reserve additions during the year. Global fossil fuel producers already hold more reserves than can be consumed within a two degree temperature limit, but we focus here on the pace of new additions.

Source: IEA, BP Statistical Review and Schroders analysis, latest data available as at 22 December.

Political action

3.3°

Tracks the level of action governments have taken to implement policies and laws that will reduce future carbon emissions. Whereas analysis under INDC (the Intended Nationally Determined Contributions that formed part of the Paris climate agreement in 2015) focuses on their statements of ambition, our analysis examines the actions they have taken to achieve those goals. We use the work of the Climate Action Tracker, a non-governmental organisation, to monitor the stringency of those policies in each country and their overall global effect.

Source: Climate Action Tracker, IEA climate policy database and Schroders analysis, latest data available as at 22 December 2018

Carbon prices

2.9°

Carbon pricing – a system of charging those who emit CO2 – is a way of reducing global warming emissions. We compare the carbon prices on European and US schemes to the levels which are likely to be needed to cut greenhouse gas emissions far enough to meet climate goals. We have combined the analyses of required carbon prices from a range of national and international organisations to estimate the levels likely to be needed.

Source : EU ETS, RGGI and Schroders estimates & analysis,latest data available as at 22 December 2018

CCS capacity

5.0°

Compares the level of carbon capture and storage (CCS) capacity likely to be developed to the estimates of what will be needed in the future, according to the IEA. We examine projects identified by the Global CCS Institute as being in operation, construction, planned or under consideration.

Source: IEA, Global CCS Institute and Schroders estimates & analysis, latest data available as at 22 December 2018

Fossil fuel production

5.6°

Compares the level of oil, gas and coal production (based on the energy contained in each fuel) to the levels required to meet the IEA’s temperature scenarios. Fossil fuel use is the key driver of greenhouse gas emissions, accounting for four-fifths of the global total. Coal is twice as carbon intensive as gas, with oil lying mid-way between them, so while different combinations of fuel are possible, their overall use will have to fall significantly in the future, ultimately to zero. Production will need to fall more quickly under more ambitious climate scenarios.

Source: IEA, BP Statistical Review and Schroders analysis.

Developing innovative tools

Andrew Howard, Head of Sustainable Research, explains how Schroders is dealing with the challenges of climate change.

The climate conundrum

What strategies are available for investors to tackle the increasingly important theme of climate risk?

Thermal coal: end of the road?

With thermal coal under pressure from economic and environmental ...

We'll always have Paris

As President Trump withdraws the US from the Paris Agreement, we ...

Mercury rising: the investment case for the Climate Progress Dashboard

Climate change will be a defining driver of the global economy, society and financial markets over coming years, decades and beyond. Whether the global economy is rebuilt on less carbon intensive foundations or the temperature continues to escalate, investors will be unable to avoid its impacts.

Climate change insights

Contact Schroders

Schroders is a world-class asset manager operating from 29 countries across Europe, the Americas, Asia and the Middle East.

Worldwide locations

For any further questions, please contact us.

For Press inquiries or any media relations questions, please contact us.

Media Contacts

Please consider a fund's investment objectives, risks, charges and expenses carefully before investing. To obtain this and other information on any Schroders Fund, please click the following link: prospectuses. Read the prospectus carefully before investing. To obtain any further information call your financial advisor or call Schroder Mutual Funds at (800) 464-3108 for Individual Investors.

Schroder Investment Management North America Inc. (“SIMNA”) is an indirect wholly owned subsidiary of Schroders plc, a UK public company with shares listed on the London Stock Exchange, and is an SEC registered investment adviser providing asset management products and services to clients in the US and Canada. Schroder Fund Advisors LLC (“SFA”) is a wholly-owned subsidiary of SIMNA Inc. and is registered as a limited purpose broker-dealer with FINRA and markets certain investment vehicles for which SIMNA Inc. is an investment adviser. The Schroder mutual funds (the “Funds”) are distributed by SEI Investments Distribution Co (“SIDCO”), a member of FINRA. SFA previously served as the distributor of the Funds. Although SFA has been replaced by SIDCO as the distributor of the Funds, SFA continues to be involved in the distribution of shares of the Funds through an agreement with SIDCO, and SFA, SIMNA and their affiliates continue to provide shareholder services to the Funds. SIDCO is not an affiliate of Schroders plc.

Restricted to Financial professionals, Institutional investors and consultants only.

By clicking continue you are representing that you 1) agree and meet the definition of a "financial professional" (including, but not limited to, registered representatives and those governed in accordance with the Investment Advisers Act of 1940) and that you 2) acknowledge your agreement with, and understanding of, the following Terms of Use and any legal information concerning this website. If you do not agree to the terms and conditions below, do not access this website or any pages thereof. Please read these terms and conditions carefully.

Disclaimer

The content herein is intended for a more sophisticated investor audience, and may not be suitable for retail investors or general public. Retail investors should visit www.schroderfunds.com or speak with their financial representative. The material on this website is issued by Schroder Investment Management North America Inc. (“SIMNA Inc.”) and contains the views and opinions of the particular individuals and is for general information only and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. Reliance should not be placed on the views and information herein when taking individual investment and/or strategic decisions. Investment strategies discussed in this website may not be available in every jurisdiction or may only be available only in institutional vehicles.

All queries about specific investment products should be directed to the Schroders office in the jurisdiction where you reside.

SIMNA Inc. is an investment advisor registered with the US SEC, and is registered in Canada in the capacity of Portfolio Manager with the Securities Commission in Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Quebec, and Saskatchewan providing asset management products and services to clients in Canada. This document does not purport to provide investment advice and the information contained in this newsletter is for informational purposes and not to engage in a trading activities. It does not purport to describe the business or affairs of any issuer and is not being provided for delivery to or review by any prospective purchaser so as to assist the prospective purchaser to make an investment decision in respect of securities being sold in a distribution. SIMNA Inc. is an indirect wholly owned subsidiary of Schroders plc, a UK-based company.

Select a region

Select a country/region

Select a site

Asset Management

Retail Investors

Retirement Services

Mutual fund investment

Asset Management

Private Investor

Asset management

Wealth management

Select a region

Select a country/region

Select a site

Asset Management

Retail Investors

Retirement Services

Mutual fund investment

Asset Management

Private Investor

Asset management

Wealth management

Schroders in the US

Schroders Globally

Climate change – navigating risks and opportunities