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Responsible spotlight - June 2023

11 months ago
Roundel Responsible Spotlight

Only early summer but temperature records are already falling 

It’s only early summer in the northern hemisphere, and yet temperature records are already toppling. May tied as the second warmest month globally, while June average temperatures so far have been the highest ever recorded. Parts of Canada were recently more than 10C above average and smoke from wildfires drifting south resulted in New York temporarily recording the worst air pollution of any global city. 

Temperatures across the northeast US, Spain, France and Italy are forecast to be ‘well above average’ for the next few months according to forecasts generated by the Copernicus Climate Change Service on behalf of the European Commission. This aligns with an update from the World Meteorological Organization (WMO) stating that in the next five years global temperatures will almost certainly exceed the 1.5C above pre-industrial level threshold set at the Paris Agreement. This will be due to the accumulation of greenhouse gases, compounded this year by the return of the naturally generated El Niño weather phenomenon, as warmer surface temperatures in the Pacific impact weather around the globe. According to the WMO, this combination of man-made and naturally occurring climate change ‘will have far-reaching repercussions for health, food security, water management and the environment’. With a 98% level of certainty, the WMO states that mean global temperatures for the five years to 2027 are forecast to be higher than during the preceding five years. Once breached, these higher temperatures are likely to reoccur with increasing frequency. While exceeding the 1.5C marker does not yet imply permanently higher global temperatures, it means there are greater chances of some abrupt and irreversible changes associated with climatic and non-climatic risks. Consequences include a greater number of more severe droughts in Africa as higher temperatures increase the chance of water evaporation, as well as an increase in extreme precipitation causing rivers to flood, particularly common across Europe. Sea levels are also rising at a faster rate, reflecting warm water expansion and melting ice packs. 

Some, but not all, of the effects of higher temperatures can be reversed 

The WMO forecast supports key findings in the sixth and final report by the intergovernmental Panel on Climate Change (IPCC). Noting that the climate related risks are now higher than those identified in the IPCC’s fifth assessment report published in 2014, the 2023 update states that the 1.5C limit will ‘likely’ be exceeded this century and it will be hard to limit warming to below 2C. There is some hope: higher temperatures globally can be reversed, although as noted, not all the damaging effects of higher temperatures can be undone.  Such a reversal will require net negative global CO2 emissions alongside a continuing pick-up in clean energy. It is encouraging that climate finance has increased by 60% since the IPCC’s 2014 report, while the price of solar panels and renewable batteries are more than 80% cheaper than in 2010.

Key emission reduction processes

Some of the most rapid and effective emission reduction processes could take place relatively simply (and cheaply) among both land and marine ecosystems by an acceleration of carbon capture and storage. Natural carbon reserves currently soak up about half of all CO2 emissions humans generate. Land based ecosystems store about three times as much carbon as exists in the atmosphere, while the deep ocean also provides a considerable storage opportunity. The seas cover 70% of the earth’s surface, with an average depth of 3.8km. Below 3km, CO2 liquefies and as it has a higher density than seawater, a deep-sea layer could act as a potential sink for large amounts of CO2 for hundreds of years. Superficially enticing, such a move could affect seawater chemistry and have negative consequence on the marine ecosystem and so more work needs to be done before this can become a scalable option. 

Roundel 1

Architas view

Actions that Architas take to invest in line with the Paris Agreement’s 1.5C goals include a combination of active stewardship, engagement and divestment, while closely watching environmental, social and governance factors. We also monitor our multi managers’ forward looking climate targets including temperature and low carbon transition credentials.

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