Recent forecasts from Morgan Stanley, JPMorgan Chase, and the Institute of International Finance suggest that the goal of limiting global warming to levels set in the 2015 Paris Agreement is now considered out of reach. Signed by nearly 200 countries, the agreement aimed to cap temperature rise to well below 2°C above pre-industrial levels, ideally limiting it to 1.5°C. But the financial giants now assume that this goal is dead in practice.

Morgan Stanley's March report bluntly states, "We now expect a 3°C world," referencing the projected temperature increase by century's end. Such a rise would bring with it severe consequences: intensified heatwaves, destructive floods, economic instability, and widespread ecological and societal disruption.

Still, amid the bleak outlook, the firm sees financial opportunity in the growing need for cooling. According to their analysis, increasing heatwaves will drive significant demand for air conditioning. Morgan Stanley estimates the global AC market could surge by 41% and be worth $331 billion by 2030. Their investor briefing highlights dozens of companies around the world that stand to gain from a hotter planet.

"Climate progress is expected to fall short of net-zero targets," the report notes. "Cooling — essential for public health and economic productivity in many regions — will likely be a major long-term growth driver."

This view is echoed by other analysts, including those at the United Nations, who warn that continued high emissions make the Paris goals increasingly unrealistic.

Concerns about climate inaction have deepened with the political resurgence of Donald Trump, who has long dismissed global warming as a hoax. During his previous presidency, he pulled the U.S. out of the Paris Agreement and rolled back environmental protections. His return has emboldened efforts to dismantle climate-related policies.

At the same time, banks themselves have been retreating from their climate commitments. Since December, the six largest U.S. banks — including JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley, and Goldman Sachs — have all exited the Net-Zero Banking Alliance, a group promoting climate-aligned banking practices.

"There's a clear pullback from the finance sector on climate," said Paddy McCully, a senior analyst at Reclaim Finance. "Much of it is driven by Trump's agenda, but banks are also using the political climate as cover to walk back promises they likely never intended to keep."

McCully criticized Morgan Stanley's bullish stance on air conditioning amid climate collapse, calling it "mind-numbingly cynical," especially after the firm weakened its own decarbonization goals and withdrew from climate initiatives.

The bank's report does note that expanding air conditioning isn't a simple fix — especially if the power source remains fossil fuels. In that case, widespread AC use could worsen emissions, further accelerating climate change.

Stephen Byrd, Morgan Stanley's global head of sustainability research, pushed back on the idea that the firm sees climate change as a business opportunity. "We don't express firm opinions — we present analyses based on expert evidence, including scientific input," he said. "We're not suggesting climate change is beneficial, but we do expect large-scale capital investment in climate adaptation measures like cooling and smart power grids."

As the climate crisis intensifies, some businesses are exploring potential gains, from new shipping routes in a melting Arctic to access to mineral resources previously trapped beneath ice. Some analysts believe such opportunities helped motivate Donald Trump's controversial proposal to purchase Greenland.

"This feels like saying the quiet part out loud," said Gernot Wagner, a climate economist at Columbia Business School, referring to the banks' open embrace of adaptation-driven profits. Wagner added that many companies are engaging in "greenhushing" — the opposite of greenwashing — by quietly downplaying their climate ambitions.

"We're not going to stay below 1.5°C — we're already there," Wagner said, referencing 2023, the first full year to exceed that threshold globally. "Climate risks will worsen before they improve. That's a given. And with that, certain investment opportunities will arise that wouldn't exist without global heating."