Going Green in a Multi-Polar World

Institutional investors are a bright spot. The latest annual report of the Asia Investor Group on Climate Change finds that more of them are integrating climate into their investment processes.

- Genevieve Cua

By how much has the world progressed in climate mitigation and abatement? A cursory look may be disheartening. 2024 was the hottest year on record; it was the first calendar year when temperatures rose by 1.55 degrees Celsius above pre-industrial levels.

At the same time, geopolitical crises drove demand for fossil fuels; economic uncertainty also cast doubt on climate pledges. In the US, Donald Trump's victory as president last November spurred anti-ESG (environmental, social, and governance) and anti-DEI (diversity, equity and inclusion) sentiment.

Yet, symptomatic of a multi-polar world, there are signs of progress outside the US. China, for example, is making strides on several fronts—not only in terms of its peak carbon and neutrality targets but also in expansion of its national carbon market beyond power.

Europe continues to progress, albeit at an uneven pace. In terms of the UN Sustainable Development Goals (SDGs), the European Union's pace of progress was more than two times lower in the period of 2020 to 2023, compared with 2016 to 2019. Still, the European Commission has identified sustainability as a driver of the region's competitiveness, particularly in energy transition.