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The geometry of net zero: an accounting conundrum waiting to happen - Federated Hermes

Emissions accounting is often used as a tool to measure progress on the route to net zero, but such methods can be inconsistent, inaccurate and imply that climate change can be reduced to a book-balancing process. As the investment opportunities surrounding climate change proliferate, it is existentially vital that investors defer to the science.

Posted on Aug 17, 2021

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... Fast reading:
  • Even if the entire global energy supply were to transition to renewables tomorrow, this would not be net zero.
  • If climate impacts cannot be treated as smooth functions then the arithmetic of net zero cannot be treated as one-dimensional.
  • Sustainable investment is about operating within dynamic, volatile and uncertain systems, not seeking comfort in fragile simplicity.

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