Introduction

4. Charting the transition to net zero

This chapter provides a narrative to describe the transition to net zero across three horizons: the 2020s, 2030s and 2040s. It includes identification of key transition opportunities, risks and mitigating actions to consider across each horizon.

4.1 introduction

The narratives outlined in each horizon overleaf illustrate a macro view of how the world evolves in a net zero scenario. They are not fully comprehensive, precise predictions of the future. However, they enable firms to identify some key changes and risks to consider in longer-term strategy development and risk management going forwards. Indeed, as noted above, regulators including the Guernsey Financial Services Commission require financial firms to consider their exposures to climate risks across a longer-term time frame. The below narratives serve as a useful introduction to this activity. Furthermore, they build on the net zero literature to consider the “just transition” objective and a wider range of environmental, social and governance considerations.