Since last year, there has been a tremendous acceleration of net zero commitments, showing that despite the Covid crisis, the climate change mitigation goals set in the Paris Agreement remain firmly on the agenda.

The ambition is clear and comes from a variety of public and private actors:
– Governments representing c. 70% of global CO2 emissions.
– 110 energy-related corporates as of February 2021, and
– Financial institutions, sometimes through joint initiatives such as the Net Zero Banking Alliance, the Net Zero Asset Owner Alliance, or the Net Zero Asset Managers Initiative, of which Amundi will soon officially become a signatory.

But while the ambition is clear, the relevant individual actions required to collectively achieve this goal have yet to be fully identified. For instance, c. 40% of companies that have announced net zero pledges have yet to set out how they aim to achieve them.

In this context, we warmly welcome the release by the International Energy Agency last month of its new Net Zero Emissions (NZE) scenario: a detailed modelling of how the energy and industrial system should evolve to keep CO2 emissions within the remaining carbon budget before falling down to net zero by 2050.
In this paper, we discuss some key takeaways from the report and how this scenario informs our engagement and investment activities.