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As the UN’s latest climate change report suggests we’re reaching the point of no return on climate change, Wall Street has been eyeing up eco-friendly stocks trying to hold back the tide.

Climate change stocks

UN’s damning climate report

The UN published a climate report on Monday that suggests the planet is at a crossroads.

According to the latest figures, limiting global warming to 1.5-2°C above pre-industrial levels will be “beyond reach” in the next two decades unless immediate action is taken to limit worldwide greenhouse gas emissions.

The world now has to move towards a fossil fuel-free state, according to the UN’s report, before heat extremes become too much for health and agriculture to thrive. That means a dramatic cut down on coal and gas-fired power stations, internal combustion powered vehicles of all sizes, and a mass shift towards renewable energy.

“The alarm bells are deafening, and the evidence is irrefutable: greenhouse gas emissions from fossil fuel burning and deforestation are choking our planet and putting billions of people at immediate risk,” UN Secretary-General Antonio Guterres said on the report’s publishing.

The Paris Agreement signed in 2015 was meant to instil a sense of urgency amongst the nations of the world. There, nearly every sovereign state on Earth pledge to keep global warming levels at 1.5°C.

But there are problems with this. The US recently called upon OPEC to pump more oil, despite green energy being a cornerstone of the Biden administration’s term ambitions. China too needs to do more to remove coal-fired power stations from its infrastructure and adopt more eco-friendly means.

With some 100 companies responsible for over 71% of all the world’s harmful emissions, there has to be more government oversight, coupled with personal responsibility on the part of consumers if the planet is to remain hospitable for humanity.

Greenwashing, the idea that companies say they’re doing their best to lower emissions without taking any action, will be intensely scrutinised from here on out.

But in any case, a new wave of climate-consciousness could spur on renewable energy stocks, as well as shares in companies that are doing their best to limit their carbon and ecological impacts.

Which climate change-tackling stocks are on Wall Street’s radar?

In a research note published after the UN’s climate report, Alliance Bernstein created a list of equities it believes could offer investors good returns based on their climate credentials.

When putting its list together, Bernstein focussed on stocks that could help investors with “separating climate leadership from greenwashing for your net-zero portfolio.” The bank selected companies with science-based targets that align with the 2015 Paris Agreement.

Bernstein also looked at firms which offer employees climate incentives, i.e., financial or other bonuses given to employees and company members based around meeting climate and emissions targets.

The final list is actually a mixed bag. If you were anticipating pure renewables energy plays, guess again. According to Bernstein, companies that offer such incentives tend to stick to their emission reduction goals, although it didn’t specify what form those incentives take.

So, who are Bernstein’s “leaders in climate actions?”. Climate change stocks that make the list are:

  • AstraZeneca
  • Pfizer
  • Walmart
  • Inditex
  • Sainsbury’s
  • AT&T
  • Vodafone
  • Yum Brands
  • WSP
  • Equinix
  • Mastercard
  • Adobe
  • Microsoft

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