Taking stock: Is 1.6°C the new 1.5°C?

Is 1.6°C the new 1.5°C?

The MSCI Sustainability Institute and its collaborators are pursuing initiatives to drive the immediacy of climate action across capital markets

The COP28 climate conference will emphasize the need for ambitious action by governments and the private sector to stave off the worst impacts of global heating. Investors and other capital-markets participants have a critical role to play in spurring companies to eliminate greenhouse gases. The Institute is teaming up with collaborators on a series of initiatives designed to help achieve that aim.

The share of listed companies that have published a decarbonization target has increased to 48%, as of May 31, 2023, up from 27% three years ago.1“The MSCI Net-Zero Tracker, July 2023 update.” MSCI ESG Research, July 2023. Still, listed companies are on track to warm the planet 2.5°C above preindustrial levels this century.2See note 1

The ambition gap: One-fifth (22%) of listed companies align with a 1.5°C pathway

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*Estimate is based on MSCI's Implied Temperature Rise metric, which estimates the rise in average global temperatures if the whole economy had the same carbon-budget overshoot or undershoot as the company or portfolio in question.

Source: MSCI ESG Research, data as of May 31, 2023.

Assessing countries' climate ambition


COP28 will mark the first global assessment of whether countries are on track to align their domestic greenhouse gas emissions with the goal of the Paris Agreement to limit the rise in average global temperatures to 1.5°C (2.7°F) above preindustrial levels.

The latest edition of the MSCI Net-Zero Tracker assesses progress toward a low-carbon future by listed companies and governments


Listed companies in the world’s largest economies are expected to slow the pace of carbon emissions reductions this decade while decarbonization by their respective home countries is on track to accelerate, the COP28 edition of MSCI’s Net-Zero Tracker finds. Our interactive chart offers a look at G20 countries and companies.


The value of speed and order in Asia’s coal phaseout


The Asia-Pacific region could slash nearly three-quarters of its combined carbon emissions and minimize economic disruption from the transition to a clean-energy economy by phasing out coal-fired power plants sooner rather than later, an analysis by the MSCI Sustainability Institute finds. The analysis, which the Institute prepared at the request of the Glasgow Financial Alliance for Net Zero, shows the most orderly pathway for phasing out coal power in 15 regional markets, including mainland China, India, Indonesia, Japan, South Korea, Vietnam and Australia. The framework could help policymakers evaluate the trade-offs of various coal phaseouts for their countries and map out suitable time scales, while helping companies and investors align their strategies with an orderly shift of the global economy to clean energy.

Concrete steps for speeding the decarbonization of cement


By Umar Ashfaq, Research Director, U.S. and Ida Hempel, VP, Market Development, Galvanize Climate Solutions


The pathway for greening the production of cement is not set in stone.

The cement industry has the potential to reduce carbon dioxide emissions from production by roughly 40% by 2030, or roughly double the reductions pledged to date by companies in the industry, thanks to a combination of technologies that are increasingly cost competitive, an analysis by Galvanize Climate Solutions and the MSCI Sustainability Institute finds.

Reaching net-zero


Investment pathways for industries that are hard to decarbonize

Reaching net-zero will require reducing emissions commensurate with the specific contribution of each industry to greenhouse-gas pollution.1Pathways to reducing emissions in line with the goal of reaching net-zero vary by sector. See, e.g., “Target Setting Protocol, Third Edition.” UN-convened Net Zero Asset Owner Alliance, January 2023. The Institute has teamed with Galvanize Climate Solutions to show how capital can influence the future emissions trajectory of hard-to-decarbonize industries such as cement, steel and chemicals.