Your portfolio has a temperature — the warming the world would reach if every company decarbonized at the rate your holdings are on track for. Ziggma displays it as Global Warming Potential, measured to 2050. MSCI publishes the same idea as Implied Temperature Rise, measured to the end of the century.
The number looks forward. A carbon footprint tells you what your holdings emitted last year. A temperature figure tells you where they are headed, built from each company's emissions track record - and in the case of funds aggregated to the fund level - plus the reduction targets it has publicly committed to.
This page covers how the figure is built, who computes it, and its limits.
The number exists because investors have two questions that corporate emissions targets don't answer: what warming their holdings are helping bring about, and what the transition away from it will cost those holdings. Many large companies say they are cutting emissions. That tells you the direction, not the speed. Speed is what decides both answers.
Holding global warming to a given level means total cumulative CO₂ emissions cannot exceed a fixed quantity. That quantity is the remaining carbon budget. It is estimated, updated annually, and shrinking fast.
The Global Carbon Budget 2025 puts roughly 1,055 GtCO₂ remaining from the start of 2026 for a 50% chance of holding warming to 2°C — about 25 years at 2025 emission rates. The 1.7°C budget is 525 GtCO₂, or roughly 12 years. For 1.5°C, estimates run from 130 GtCO₂ (Indicators of Global Climate Change 2026, roughly three years) to 170 GtCO₂ (Global Carbon Budget 2025, roughly four). Human-caused warming reached 1.37°C in 2025.
Every company's emissions draw on the same budget. This is what makes rate of reduction the variable that matters. A company cutting emissions 2% a year and a company cutting 7% a year are both reducing. They consume very different shares of a fixed total before they arrive at zero, and the difference compounds across the decades in between.
As the 1.5°C carbon budget has about three years left, the S&P 500 actually got half a degree hotter over the past year. ACA Ethos puts the SPDR S&P 500 ETF’s 2050 temperature alignment at 4.0°C in 2026, against 3.5°C a year earlier, with rising emissions among index constituents behind the move.
That is the case for measuring speed rather than direction: the aggregate trajectory of the largest US companies worsened over a year in which many of them were publicly committed to improving it.
Each additional 180 GtCO₂ emitted translates to roughly 0.1°C of warming. That conversion is what allows a company's emissions pathway to be expressed as a temperature. Temperature alignment applies it at the holding level and aggregates upward. The IPCC pathways underlying the budget are the same ones behind every credible version of the metric.
A company’s emissions trajectory is increasingly priced rather than merely discussed. That is what separates temperature alignment from a values screen: it tracks an exposure that shows up in cash flows.
The World Bank’s State and Trends of Carbon Pricing 2026 counts 87 implemented policies covering 29% of global greenhouse gas emissions as of April 2026, split between 47 carbon taxes and 40 emissions trading systems.
ETS coverage has tripled since 2016, from 8% to over 24%. Revenues reached more than $107 billion in 2025, and the average direct carbon price is close to $21 per tonne of CO₂ equivalent.
That average price is low relative to what most decarbonization pathways assume, and coverage remains uneven across regions and sectors. The point is not that carbon is expensive today. It is that the mechanism for making it expensive is built, funded and expanding, and it applies to emissions a company has not yet committed to eliminating.
Three other channels reprice on the same axis. Physical risk affects asset values and insurance costs directly. Cost of capital moves as lenders and equity investors adjust to transition exposure. Regulatory reach extends past domestic emissions — the EU’s Carbon Border Adjustment Mechanism covers under 0.5% of global emissions today but has prompted similar policy work elsewhere.
A company on a 4°C trajectory is not carrying reputational exposure. It is carrying a liability that has not yet been priced into the shares. Temperature alignment is one way of seeing where that sits in a portfolio.
Yes, with a distinction worth stating precisely. Buying shares on the secondary market does not route new capital to the issuer. That changes the mechanism of financing. It does not eliminate ownership, participation in profits, or delegated governance rights. Those rights are the responsibility. Owning a share in a company means having a say in what it does, and a stake in what it does next.
This is the compressed version of a longer argument. The full treatment — including what shareholders owe the companies they own, and how pass-through voting changes it — is in active shareholder investing.
This extends to passive investing. An investor holding an S&P 500 index fund owns a proportional interest in the fund and, through it, receives the underlying companies’ returns, bears their risks, and delegates their voting rights to the fund manager. The fund is an intermediary in that chain, not a break in it.
Management acts on the mandate its owners give it, and reduction targets that survive quarterly earnings pressure need owners who signal they want them. Whether a specific purchase caused a specific tonne of emissions is a separate and much narrower question from whether an owner is proportionally associated with them.
A temperature figure helps you understand how fast your holdings are cutting emissions, relative to how fast they would need to cut them for the world to hold a given warming level. Faster than required, the number comes in below that level. Slower, it comes in above.
Two inputs drive it. The first is what a company has actually done — its emissions over recent years, and the trend in them. The second is what it has publicly committed to do: stated reduction targets, the years they apply to, and whether it has set a net-zero date. A company with a strong track record and no forward target is treated differently from one with a weak record and an aggressive target, and providers differ on how much weight to give each.
This is the split from a carbon footprint. A footprint is an accounting statement about a period that has ended. A temperature figure is a projection, and it inherits every weakness a projection has — it depends on companies disclosing emissions, on their targets being specific enough to model, and on the provider’s assumptions where either is missing.
The metric has no settled name, which makes it harder to research than it should be.
Implied Temperature Rise is the term to search on. It is what MSCI publishes, what the TCFD Portfolio Alignment Team standardized around, and what appears in ISSB-aligned climate disclosures. Portfolio alignment is the broader category term — ITR is one approach within it, alongside binary target-based metrics and maturity-scale assessments.
Ziggma labels the figure Global Warming Potential in-product, and that label collides with an established term. In climate science, Global Warming Potential is a conversion factor: it expresses how much warming a non-CO₂ gas causes relative to CO₂ over a fixed horizon. Methane’s 100-year GWP under IPCC AR6 is about 30 for fossil sources and slightly lower for biogenic ones. It is a property of a gas, not a property of a portfolio. The two meanings share a name and nothing else.
For clarity: the Global Warming Potential shown on your Ziggma portfolio is the temperature alignment metric described on this page, not the IPCC conversion factor.
Three groups are involved, and they do different things. Data providers compute the number. Reporting frameworks require or recommend it. Asset owners set climate targets, most of which are not temperature targets. Collapsing these together produces a badly wrong picture of how widely the metric is actually used.
MSCI publishes the most widely referenced version. Its Implied Temperature Rise compares a company’s current and projected emissions across all scopes against that company’s share of the remaining global carbon budget consistent with holding warming well below 1.5°C. A company projected to emit below its share undershoots; one projected to exceed it overshoots. At portfolio level, MSCI sums projected emissions across holdings and compares that against the sum of their budgets. The company-level dataset covered more than 12,000 companies in the MSCI ACWI Investable Market Index as of September 2024, and MSCI positions the metric as support for ISSB-aligned disclosure.
Bloomberg computes a competing version on a different foundation. Its Implied Temperature Rise Metrics use the Temperature Rating methodology recommended by the Science Based Targets initiative, which translates a company’s projected emissions or stated carbon targets into a temperature. Two credible providers, two methodologies, one metric name. That is the root of the divergence covered below.
The TCFD Portfolio Alignment Team produced the reference work that standardized how portfolio alignment metrics are constructed and compared. The ISSB carried climate disclosure requirements into accounting-standard territory, and MSCI markets ITR explicitly as ISSB-aligned reporting support. Regulation, not investor demand, is doing most of the work here.
The UN-convened Net-Zero Asset Owner Alliance is the largest coordinated group. As of this writing it lists 85 asset owners with $9.2 trillion in assets under management, of which 79 have published targets covering $8.4 trillion under its target-setting framework. Members include CalPERS, the largest US public pension fund, and the New York City Employees’ Retirement System.
Their targets are not temperature targets, and this matters. NYCERS commits to cutting Scope 1 and 2 financed emissions intensity in its public equity and corporate bond portfolios by 59% by 2030 and 100% by 2040 against a 2019 baseline, alongside engagement targets. CalPERS commits to engaging at least 20 companies on climate and allocating $100 billion to climate solutions by 2030, with sector-level carbon intensity targets. These are emissions-intensity and engagement commitments. Membership in a net-zero alliance is not adoption of a temperature metric, and no honest account of ITR’s reach should imply otherwise.
A temperature figure is a modelled estimate rather than a measurement, which is worth holding in mind when reading one.
Three things it can't do: produce a number other providers agree with, tell you what most investors are actually using, or promise that institutional adoption keeps growing. Each limit traces back to the same fact — a temperature figure is a modelled estimate, not a measurement.
The most common approach is maturity scale alignment, which sorts each holding into a category — from not aligning up to achieving net zero — against criteria covering ambition, targets, emissions performance, disclosure and capital allocation. A company either meets each criterion or it doesn’t; nothing is blended into a score, and nothing is compared against peers. That is the method behind the Net-Zero Investment Framework’s portfolio coverage target, the framework IIGCC identifies as the most widely used for net-zero target setting, and MSCI and Sustainalytics both publish data mapped to it. IIGCC finds implied temperature rise to be the least-used approach investors apply, though it appears more often in descriptions of financial products and among data providers. MSCI itself positions its temperature metric as something that enhances a maturity-scale strategy rather than replacing it.
This is why the temperature figure Ziggma displays is one provider’s reading rather than a verdict. The number is useful for comparing holdings against each other and for spotting which positions drive a portfolio’s reading. It is not precise enough to justify a decision on a difference of a tenth of a degree.
Ziggma relies on its impact data ACA Ethos for the temperature alignment measures on stocks, ETFs and funds.
The ACA Ethos inputs are forward-looking. Each holding contributes its emissions track record, its stated reduction targets, and its net-zero target date where one exists. The figure carries an explicit baseline year against a current data year, so a holding’s reading can be compared against its own prior reading. Holdings without disclosed emissions or modellable targets are the main source of uncertainty in any provider’s figure, this one included.
ACA Ethos coverage extends to individual stocks and to ETFs, which is why a fund like SPDR S&P 500 Fossil Fuel Reserves Free ETF carries its own reading rather than being left out.
