The industrials sector emits 25% of global carbon dioxide (CO2) emissions. Including construction inputs such as cement, steel and iron, as well as petrochemicals such as plastics and ammonia, the sector includes many high emitting activities known to be hard to decarbonise.
As the global economy accelerates its efforts to meet the goal of net-zero emissions by 2050, the industrials sector will have both a crucial role in decarbonising the global economy and face substantial transition risks. Growing policy pressures, risk of legal and reputational damage, and technological innovations will reduce the market share of conventional producers with less carbon-intensive alternatives.
This brief, prepared by the United Nations, explores the key physical and transition risks that banks, investors and insurers with clients in the industrials sector face. It includes case studies and provides concrete recommendations to identify and mitigate climate risks in the sector, while aligning financing with a just transition approach that considers the impact of the transition on workers, indigenous groups and local communities.