COP31 Net Zero Atlas

A decade after the Paris Agreement, the range of plausible global warming outcomes has narrowed considerably. Our sixth Net Zero Atlas examines how the evolving global climate outlook may affect countries, companies and financial markets, combining analysis of transition risk with the economic impacts of physical climate risk. 

Our analysis finds that successive rounds of national climate commitments have progressively shifted the global emissions trajectory, making 3–4°C ‘Hot House’ scenarios increasingly unlikely.  More than 150 countries, accounting for over 80% of global emissions, have come forward with new 2035 Nationally Determined Commitments (NDCs) since 2025, implying a further 3.5 GtCO₂e reduction in annual emissions between 2030 and 2035. Yet current commitments still point towards a world warming by more than 2°C.

Against this backdrop, this year’s Atlas explores what a ‘well-above-2°C’ world could mean for economies, companies and financial markets, including how physical climate shocks can propagate through supply chains, trade and demand shifts.

• The Paris framework continues to deliver progress. More than 150 countries responsible for over 80% of global emissions have submitted new 2035 NDCs. 
• A broadening and deepening energy transition has made 3–4°C ‘Hot House’ scenarios increasingly unlikely. Yet the pace of decarbonisation remains insufficient, with global economy appearing increasingly anchored to a ‘well-above-2°C’ trajectory. LSEG analysis estimates that meeting current NDC pledges and subsequently holding emissions constant would imply approximately 2.35°C of warming. Continuing emissions reductions at the NDC-implied rate beyond 2035 would lower this to around 2.16°C. 
• Achieving a well-below-2°C outcome would require substantially faster emissions reductions: Our modelling suggests G20 countries would need either to cut emissions by 31% by 2035, almost three times the pace implied by the NDCs, or alternatively more than quadruple the annual pace of emissions reductions post 2035.
• Meanwhile, rapid growth in low carbon technologies is transforming the economics of decarbonisation: wind and solar’s share of G20 electricity generation has risen from around 5% in 2015 to almost 20% in 2025, with deployment increasingly driven by economic as well as policy considerations.
• As temperatures rise, heat and drought are set to weigh on G20 productivity, while once-rare extremes, including floods, wildfires and cyclones, become more common, causing large, concentrated losses. Assuming that warming reaches ‘well-above 2°C’ by mid century, our analysis finds that chronic heat and drought account for around 73% of direct impacts on economic growth from physical climate risk globally, rising above 80% in Canada, India, China and Brazil.
• However, physical risk impacts can extend beyond direct physical damage. Impacts on infrastructure, labour and land productivity can propagate through supply chains, trade and demand amplifying economic disruption. In our analysis, indirect effects account for 53% of the total modelled economic impact in the EU, compared with just 23% in India.
• Physical risk exposure varies significantly across sectors and markets. Modelled impacts are 2.29 times the FTSE All-World average in Real Estate versus 0.65 times in Healthcare. Across equity markets, FTSE China A stands at 2.3 times the average, compared with 0.8 times for the Russell 1000.
• Adaptation and resilience will increasingly redefine national and business priorities. Over half of FTSE All-World companies now refer to taking adaptation measures in their disclosures – particularly in heavily exposed sectors like Utilities (85%) or Basic Materials (67%).  
• While G20 members are increasingly translating adaptation strategies into laws and monitoring frameworks, investment is failing to keep pace with estimated needs, with most climate finance still directed towards mitigation. China currently spends less than 5% of climate finance on adaptation, while the UK government estimates that adaptation funding would need to grow to c. 2% of economy-wide investment.

The range of plausible warming outcomes has narrowed as the transition gathers momentum and successive rounds of national commitments are delivering meaningful, if uneven, progress. Yet our analysis shows that the world remains on a trajectory well above the Paris Agreement’s temperature goals.

For companies and investors, this means navigating the economic consequences of rising temperatures and increasingly severe weather extremes while the energy transition reshapes industries and capital flows across sectors, from transport to power generation. Responding to these risks also creates opportunities as societies seek to decarbonise, adapt and build resilience.

 LSEG’s Net Zero Atlas – now in its sixth edition – brings these perspectives together through trusted data and rigorous analysis. It examines progress on national climate commitments, the economic implications of physical climate risks and the growing importance of adaptation. These insights serve as a practical guide for investors navigating shifting climate risks in an uncertain world. 

• Integration of Implied Temperature Rise (ITR) Metrics: This work innovatively applies country-level ITR scores to assess the ambition of national climate targets. By translating emissions trajectories into temperature outcomes, it offers a clear, comparable benchmark for evaluating how aligned each country is with the Paris Agreement goals.
• Forward-looking analysis of NDC 3.0 pledges: The analysis provides a detailed assessment of the third generation of NDCs for 2035. It evaluates their implications for global emissions pathways, transition risk, and decarbonisation speed, making it highly relevant for investors and policymakers ahead of COP31.
• Measuring the macro-economic and financial impacts of physical climate change: Collaborating with Planetrics, a physical climate risk data and analytics provider, the Atlas goes beyond measuring climate hazard exposure to assess how physical risks translate into impacts on economic growth, companies, sectors and financial markets, including indirect effects transmitted through supply chains, trade and demand.

• COP30 Net Zero Atlas 
• COP29 Net Zero Atlas
• The COP28 Net Zero Atlas
• The COP27 Net Zero Atlas
• The COP26 Net Zero Atlas