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.
- 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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