In 2015, the COP21 — also known as the Conference of Parties (COP) / 2015 Paris Climate Conference— achieved a legally binding agreement on climate, with a pledge to keep global warming below 2°C. As reported by Huff on Business Green, COP21 also had an impressive display of business support for climate action.
And, yes, in case you’re wondering, the U.S. did sign the climate pact.
COP21 and its Elements
The COP21 conference negotiated the Paris Agreement on the reduction of climate change. Together, 174 countries of the 196 in attendance signed the agreement and began adopting it within their own legal systems. The UN Framework Convention on Climate Change outlines how the agreement will seek to combat climate change and to accelerate and intensify the actions and investments needed for a sustainable low carbon future. The Paris Agreement requires all parties to put forward their best efforts through “nationally determined contributions” (NDCs).
Getting Business to Understand and Implement the Paris Agreement
In a statement released by UN Sustainable Goals, “Businesses and companies around the world have been at the forefront of efforts to persuade government leaders to reach a meaningful global climate agreement in Paris.” The University of Cambridge Institute for Sustainability Leadership (CISL) has issued a series of business guidelines called “A New Climate for Businesses.” The document provides an overview of what was agreed upon at the COP21 conference, explains the major implications are, and helps businesses to formulate their strategic responses.
Here are the highlights:
- It is the first truly global and binding agreement on climate change that includes specific actions on how to deliver a zero carbon economy.
- It has huge political traction, uniting heads of government, religious leaders, activists, NGOs, businesses, business associations, cities, investors, etc.
- It is ambitious. The global temperature goal has been strengthened from a target of keeping global warming below 2°C, to an aspiration of 1.5°C in the final Paris Agreement.
- It gives space for non-government stakeholders (i.e. cities, investors, business, local government, civil society) to participate in generating solutions (see box on business engagement with the Paris process).
- It is built on bottom-up national commitments, many of which are already being put into place by governments.
What Effects will the Paris Agreement Have on Business?
- The low-carbon transition will be consistent across all sectors of business.
- Investments will shift toward clean energy, specifically low-carbon research and development.
- Technology solutions will emerge as new ways will be sought to offset costs.
- High carbon projects will incur more costs.
- Low carbon projects will replace high carbon existing practices.
- Assessing climate risks will be part of project design, due to financial implications.
- Because consumers of all ideologies will begin to prefer green businesses, companies will come under scrutiny for their climate change policies and behaviors.
- Some governmental agencies will subsidize emissions-saving and the necessary research, testing, and accreditation that comes along with it.
- Climate-friendly business models, such as what’s often referred to as a “sharing economy” (think Home Exchange) will become common.
Already the shift is taking place. Amalgamated Bank, a New York company that calls itself the nation’s “leading progressive bank,” said it would achieve that target in 2017. Bank of America has pledged to go carbon neutral by 2020. And they’re not alone. Groups of Fortune 500 companies and others have begun the shift toward carbon neutral business practices.
Check out this progress tracker (updated 08/09/2016) if you’re interested in how the Paris Agreement is being implemented.
Photo credit: kevin dooley via Foter.com / CC BY