Last week, the United Nations Environment Programme released a report indicating that the objective of the Paris Agreement to limit global temperature increases over the remainder of the century to just 1.5 °C above pre-industrial levels will likely be missed. The EU, which declared a climate emergency last week, reported it will likely miss its 2030 reduction targets, too.

No wonder UN Secretary General Antonió Guterres opened the COP25 session on Tuesday by chastising the world leaders for not having done enough to tackle climate change since the Paris Agreement was signed in 2016.

“Do we want to be remembered as the generation that buried its head in the sand and fiddled as the planet burned?” Guterres asked, telling the heads of state that COP25 is an opportunity for governments to “get on the right path.”

Despite his stern words, Guterres seems optimistic that the EU will still be a leader in tackling climate change, telling the COP25 summit he is “convinced” that Europe will be in a position to negotiate with China, India, the United States, and other major polluters to get them on board with tackling climate change.

But China and the E.U. were at loggerheads just last week as China pushed back against E.U. plans to enact a so-called carbon border tax—a duty levied on imports from countries that aren’t meeting climate targets. China argued such a move would damage attempts to tackle climate change and called the tax climate protectionism—which sounds like a good thing, actually.

Now in Madrid, the Paris signatories are tasked with hashing out two remaining issues of the Paris Agreement—specifically whether it’s feasible to have a common timeframe for all countries to implement their climate change battle plans and how to implement Article 6, which calls for an international cap and trade carbon market.

Not everyone is in favor of Article 6. Critics say could derail the entire Paris Agreement if nations game the system by under-promising and over-delivering on emission targets, earning rewards for surpassing their goals.

Resolving Article 6, which was the last component of the Paris Agreement to be agreed to in principle in 2015, will be a tricky operation. The COP25 concludes on December 13 next week. Stay tuned.

Eamon Barrett
Eamon.barrett@fortune.com

P.S. For those wondering, Greta Thunberg managed to make the voyage back across the Atlantic, landing in Lisbon on Monday. The young Swede is expected to attend a demonstration in Madrid tomorrow.

CARBON COPY

Davos redefines business

The World Economic Forum released a new Davos Manifesto Monday, that aims to layout the “Universal Purpose of a Company in the Fourth Industrial Revolution”—as per the paper’s title. Much like the BRT’s updated mission statement, the new Davos Manifesto proclaims a company’s purpose is to “engage all stakeholders in shared and sustained value creation.” It also calls for all companies to pay taxes, fight corruption, support human rights and push for fair competition. Time

Going for coal

China could be a “zero-carbon” economy, i.e. have net zero emissions, by 2050, according to a new report from the Energy Transitions Commission. Reaching that target would not be easy: it requires China to electrify all land transport and use biofuel for aviation and shipping, yet the nation continues to invest in coal and is reducing subsidies for renewables. Associated Press

Playing an open hand

MSCI published its environmental, social and governance (ESG) ratings for over 2,800 companies last week. MSCI uses 37 criteria to determine a company’s ESG rating, ranking them from “laggard” through “average” to “leader.” Both Facebook and Alibaba are ranked average, or BBB, while Google is a leader with an AA score. MSCI plans to release more ESG rankings next year, bringing the total catalogue to 7,500 companies. Reuters

Mind the gap

Last week the UN released its annual Emissions Gap Report, which assesses the difference between “where we are likely to be and where we need to be” in terms of greenhouse gas emissions. The findings were “bleak,” the report says, finding countries are not doing nearly enough to limit global temperature rises to 1.5 °C above pre-industrial levels—a target that will likely be missed. To get there, emissions need to be cut by 7.6% annually for the next decade; over the past decade, however, emissions rose 1.5% each year. New York Times

IN CASE YOU MISSED IT

‘A Giant House of Cards’: How the Era of Easy Money May Come to Haunt a Slew of Debt-Ridden Companies by Larry Light

EU Likely To Miss 2030 Climate Change Target by AP

Why IBM Is Joining the Corporate Chorus Calling for a Carbon Tax by Katherine Dunn

China Once Welcomed the World’s Trash. Now It’s Using A.I. and Facial Recognition to Handle Mountains of Its Own by Grady McGregor

 EasyJet Says It Will Be The First Major Airline To Operate Net-Zero Carbon Flights by AP

H&M Is the Latest Fashion Retailer to Test Clothing Rental by Bloomberg

CLOSING NUMBER

50 years

The scientific community has been on the money about global warming and its ties to greenhouse gas emissions for close to 50 years, according to new research from the University of California. The study looked at 17 climate models dating back to the 1970's, which mapped projected temperature rises against GHG emissions with uncanny accuracy. That's not to say the models predicted the future: in some cases the models overestimated how much GHG the world would produce, but the maths on what temperature rise that would cause has been accurate. The world should have listened sooner, obviously, but it's not too late to start now.

This edition of The Loop was edited by Eamon Barrett. Find previous editions here, and sign up for other Fortune newsletters here.