The Australian Council of Superannuation Investors (ASCI) said companies must align their corporate strategies with the landmark Paris Agreement and the target of net-zero emissions by the year 2050.

Firms must also set short, medium as well as long-term emissions reduction targets, said the council, adding it’s tightening its climate change policy and could recommend voting against directors of companies who’re not doing enough to fulfill Paris goals.

“Climate change risks are deeply embedded in the financial system and impact all sectors and asset classes. For long-term investors, this poses a serious challenge to long-term value creation across investment portfolios,” said ASCI CEO Louise Davidson.

The UK government has decided to set the world’s most ambitious environmental target into law to slash carbon emissions by 78% by 2035 compared to 1990 levels, in accordance with the recommendation from the independent Climate Change Committee.

This sixth Carbon Budget will ensure the island nation remains on track to end its contribution to greenhouse gases while remaining consistent with the Paris Agreement temperature goal.

“We want to continue to raise the bar on tackling climate change, and that’s why we’re setting the most ambitious target to cut emissions in the world. The UK will be home to pioneering businesses, new technologies and green innovation as we make progress to net zero emissions, laying the foundations for decades of economic growth in a way that creates thousands of jobs,” said British PM Boris Johnson.

It must be mentioned here that the Carbon Budget, for the first time, will include Britain’s share of international aviation and shipping emissions.

The United States became the first nation in the world to formally quit the Paris Agreement, the landmark deal struck in 2015 designed to combat global warming, intensify actions for low-carbon growth and avert catastrophic climate change.

The global accord aims to limit global warming to “well below” 2°C above pre-industrial temperatures.

President Donald Trump, a staunch opponent of the international accord, announced the move in June 2017 on grounds that it was ‘unfair’ to the United States. The US government notified the United Nations formally last year.