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For 2024, Expect Investors to Stay Laser-Focused on Climate, Sustainalytics & Indexes Chief Says

The annual climate summit called COP28 has supplied reasons for both hope and dejection. It isn’t news that the world largely isn’t on track to meet the Paris Agreement’s target to limit global warming to 1.5 degrees Celsius. That’s something that Morningstar Sustainalytics’ analysis of 6,500 companies shows us. For now, companies are on track for an emissions pathway to a 3.0-degree future, which would cause some of the more catastrophic effects of climate change to kick in.

But there are plenty of venues for action by investors, large and small, and for companies, as the COP pledge to slash methane, one of the most powerful greenhouse gases, attests. And the world is moving inexorably toward creating conditions necessary for climate action. As my colleague Kunal Kapoor, Morningstar’s CEO, says, “The point is not whether the ambition is achievable, it’s that the train has left the station. Investors who treat climate transition risk as an investment risk and climate opportunities as investment opportunities are accounting for that reality.”

Read more from Morningstar.

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