Paris climate target: something needs to change

If humanity continues in this way, the global CO2e budget is likely to run out in the foreseeable future. Without a reduction, a temperature increase of 4 to 6 degrees Celsius is likely by the end of the 21st century. This could have far-reaching consequences for people, the environment and biodiversity.

Climate risks are also investment risks

The Network for Greening the Financial System estimates global market value losses of 4.2 trillion to 13.8 trillion US dollars, should temperatures rise by four to six degrees Celsius by the end of the 21st century. Zürcher Kantonalbank is the asset manager of our investment funds under Luxembourg law. As a pioneer among Swiss asset managers, it aligns its investment activities in active investments in traditional asset classes with the goals of the 2015 Paris Agreement on climate protection, as standard.

This is how CO2e emissions could develop with measures, without measures and with measures to achieve the Paris climate target (estimate).

The Paris climate goal as an opportunity

1 With our Responsible and Sustainable investments, we aim to protect against potential financial risks of climate change and thus also protect you.
2 Sustainable products and new technologies are enjoying increasing demand; you can systematically use this trend towards greater sustainability with our Sustainable investments.

Good to know: CO₂e

CO2e or CO₂ equivalents standardise the climate impact of greenhouse gases and make them comparable. Besides carbon dioxide, there are other greenhouse gases such as methane or nitrous oxide. The gases contribute to the greenhouse effect to varying degrees and remain in the atmosphere for different lengths of time. Methane, for example, has a 28 times greater climate effect than CO₂, but remains in the atmosphere for less time.

Good to know: CO₂e intensity

Based on CO2e intensity, we compare the greenhouse gas emissions of small, medium-sized and large companies from different sectors. To do this, we divide CO2e emissions by revenue and obtain the environmental pollution per unit of revenue as a measure and comparable reference. In the case of state emissions, CO2e emissions are divided by gross domestic product.

Our climate goal

Our goal is clear: We reduce the CO2e intensity of our actively managed funds in the traditional asset classes by at least four percent every year, as standard, since the beginning of 2020, in line with the Paris climate target. In doing so, we align the investment activities of our active Responsible and Sustainable funds with traditional investments to the 2-degree target and, in the case of individual Sustainable funds, to the 1.5-degree target of international climate policy. We achieve our climate goal with engagement and shifts in capital allocation: We...

...demand and promote ambitious sustainability goals in dialogue with management that are also measurable and therefore comparable.
...reduce our investments in CO2e-intensive companies or states without a strategy for reducing their CO2e emissions.
...invest more in CO2e-efficient states or companies and in companies with ambitious reduction targets.
...minimise risks with emissions-intensive behaviour and maximise return opportunities with climate-friendly future technologies.

Some CO2e reduction is regulated by the market. But that's not enough. That is why we get involved with engagement and voting and adjust our capital allocation if necessary.