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- Sustainability
- Understanding ESG
- Transition to Net Zero
- Environmental
HSBC Climate Barometer
Assessing G20 exposure and readiness
- We present the latest evidence on physical climate impacts across G20 countries…
- …and assess whether they are ready for the transition to a low-carbon economy
- Corporates and investors can use this information to design credible transition plans
Governments, corporates, and investors can no longer ignore the state of the planet. HSBC’s new Climate Barometer presents the latest evidence on physical climate impacts across G20 economies, and assesses how prepared countries are to transition to a low-carbon economy.
Global temperatures are rising. Climate impacts around the world are intensifying. The world is failing to reduce emissions in line with a net zero 2050, 1.5C scenario. Transition risks are also rising. The imperfect low-carbon policy response, technological change, shifting geopolitics, economic shocks, and other factors are all combining to create a bumpy, volatile, and disruptive period of change and transition.
Europe has experienced the fastest temperature rises of any region; South Africa is among the countries most exposed to physical climate impacts
It has never been more important, in our view, for investors to understand climate change and integrate climate issues into their asset allocation decisions. To do this effectively requires up-to-date and credible evidence. Our HSBC Climate Barometer uses a unique dataset to analyse physical climate impacts and readiness to transition to a low-carbon economy across the world’s major economies.
We ask two questions about each of the G20 countries:
- How exposed is it to the physical impacts of climate change? We consider extreme events, people affected, deaths, and damage costs
- How prepared is it for the low-carbon transition? We look across energy, transport, buildings, and forest & land sectors
Our analysis suggests some key common themes and experiences. Transition readiness is fairly poor across the G20, for example, with key countries needing to rapidly accelerate action to meet interim 2030 net zero targets.
At the same time, we see some significant differences between regions, countries, and even between different areas in the same country. Europe, for example, has experienced the fastest temperature rises of any region, and South Africa is among the countries most exposed to physical climate impacts – within the country, some provinces face much starker challenges than others. These differences often matter deeply for assessing asset exposure and making investment decisions.
The picture, then, is too nuanced to be conveyed by a simple ranking system. Rather, we provide evidence to help decision-makers in a rapidly changing and uncertain world.
HSBC’s Climate Barometer is a reference document in what we intend to be a series. It will allow us to track physical climate impacts and transition progress over time, deepening and refining the analysis. We hope it can assist corporates and investors as they design credible action-based transition plans and make cleaner and more resilient asset allocation decisions.
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