World temperatures will rise 3C if listed companies do nothing to change their current projected emissions, new research suggests, underlining the difficulty of trying to invest sustainably in broad-based passively managed ETFs.

The October 2021 release of the quarterly MSCI Net-Zero Tracker, which examines the progress of more than 9,000 of the world’s most investable companies towards reducing carbon emissions, reveals the companies’ contribution to global warming.

The study found a majority (57 per cent) of those companies, which are constituents of the MSCI All Country World Investable Market Index, did not align with any globally agreed temperature target. Worse still, it found that fewer than 10 per cent were aligned with the Paris Agreement signed in 2015 to try to keep global warming to 1.5C above pre-industrial levels.