New analysis from LSEG highlights how the global climate policy landscape has shifted ahead of COP30, with a significant increase in 2035 emissions targets despite most countries missing an earlier UN deadline.
While 95% of nations did not submit their new nationally determined contributions (NDCs 3.0) by February, recent announcements mean 15 G20 economies now have 2035 climate goals in place, representing around 71% of total G20 emissions. According to LSEG, these commitments introduce sharper decarbonisation expectations for governments and markets over the next decade.
LSEG’s latest Net Zero Atlas shows that the new 2035 targets mark a substantial acceleration in emissions cuts after 2030. Its modelling indicates that annual reductions across G20 economies with updated targets increase to between -2.6% and -3.5% for 2030–35.
This is a notable jump from the -0.5% to -0.7% annual reductions observed between 2023 and 2030 under previous NDCs. Overall, this represents an additional 13–18% emissions cut in the five years following 2030. For companies and investors, this shift raises transition risk as major economies move faster towards low-carbon pathways, alongside heightened physical climate risk.
The fifth edition of the Net Zero Atlas compiles extensive data on both transition and physical risks to help investors understand how exposed G20 markets may be. It offers a broad view of the pressures and uncertainties created by new policy momentum and climate-related hazards.
LSEG’s transition risk findings highlight how policy ambition is rising despite geopolitical complexities. More than 70 countries have now submitted or announced 2035 climate targets, including major emitters such as China, Russia, Brazil and the EU. The US has withdrawn from the process, while India has not yet outlined its updated emissions pathway. Note: India’s detailed 2035 trajectory is not available. LSEG reports that the new targets are broadly aligned with a straight-line path from 2030 commitments toward long-term goals.
Collectively, these pledges point to a projected temperature rise of around 2.2°C to 2.3°C, slightly lower than the previous estimate of 2.4°C but still far from the Paris Agreement goals. Peaking emissions in large emerging economies, including China and Türkiye, contribute to faster global reductions, with mixed progress in countries where emissions have already peaked.
The physical climate risk analysis shows substantial future exposure across major economies. LSEG estimates that physical hazards could place a further half billion people and US$20tn in GDP at high risk by 2050 across eight key economies, bringing total exposure to 839m people and US$28.3tn. Cyclone risk is expected to grow sharply in cities such as Tokyo, New York and Shanghai, with Japan projected to see over 80% of its GDP and population face a Category 1 or stronger typhoon at least once a decade, compared with under 5% today.
Extreme heat exposure is also set to rise, with more than 327m people expected to face temperatures above 35°C for over 30 days per year by 2050, up from fewer than 10m today. Water stress will intensify across 670 regions, while flooding risk is particularly acute for the UK. National exposure could reach 9.7% of GDP by mid-century, and the Thames Estuary alone could see around $100bn at risk. Wildfire exposure is also set to increase, including 9.5m people in California.
A key differentiator of the Net Zero Atlas is its use of Implied Temperature Rise metrics, which translate emissions pathways into projected temperature outcomes and offer a consistent benchmark for assessing national ambition. The analysis also takes a forward-looking view of NDC 3.0 commitments for 2035 and includes detailed country-level comparisons of emissions trajectories to show where decarbonisation is accelerating or slowing.
For investors, the report underscores the importance of understanding how shifting government policies are reshaping economic outlooks and valuations. While physical climate risk is increasingly acknowledged across markets, its scale and geographic concentration remain uncertain. The Atlas provides granular hazard mapping, socio-economic projections and country-specific emissions assessments to help investors translate climate modelling into practical decision-making.
Download the Net Zero Atlas here.
Copyright © 2025 FinTech Global
