Climate agreement worth trillions in business opportunities

21st April 2016


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  • Adaptation ,
  • Mitigation ,
  • Reporting ,
  • Carbon Trading

Author

Jonathan C Garrett

A coalition of business groups has called on companies to take bold action on climate change ahead of the signing of the Paris agreement tomorrow.

In a new analysis of the market opportunities arising from the deal, the We Mean Business coalition highlighted that all major economies are committing to restructuring their energy systems, changing transport patterns, and transforming infrastructure, buildings and land use.

The Paris agreement means that, for the first time, global business operations, supply chains and investment portfolios are subject to the same international policy framework, the coalition said. This will promote comparable effort by all countries, minimise competitive imbalances between economies and help harmonise global standards for low-carbon technologies, it added.

Collectively, the national climate plans under the Paris agreement represent at least a $13.5tn market for the energy sector alone in energy efficiency and low-carbon technologies over the next 14 years, according to the coalition.

Edward Cameron, head of policy at We Mean Business, said: ‘The governments of the world have spoken with one voice and have committed to decarbonising the global economy during this century. Trillions of dollars of market opportunity await businesses with the foresight to lead across their entire value chains.’

The coalition comprises seven business organisations, including the CDP, the Prince of Wales’ Corporate Leaders Group and the World Business Council for Sustainable Development. Since the international climate deal was signed at the UN COP21 negotiations in Paris in December, 51 more companies, including Bloomberg, Ferrovial, Sky and Toyota, have joined the coalition.

Also since COP21, 33 companies have agreed to set science-based targets, in line with methodologies established by the World Resources Institute, WWF, CDP and UN Global Compact, according to the initiative’s website. This takes the total number of major companies aiming to reduce greenhouse gases in line with science to 147.

As evidence of the need for businesses to take action We Mean Business pointed to this year’s World Economic Forum global risk assessment. It found failure to mitigate or adapt to climate change was the biggest risk to business in coming years. However, research by CDP and Business for Social Responsibility (BSR) has found that only half of supplier companies that have identified climate change as a significant risk to their operations, revenue or expenditure are managing it effectively.

More than 155 countries have said they will sign the Paris agreement at a ceremony to be held at the UN’s headquarters in New York tomorrow. After signing, countries will have to ratify the deal through national constitutional and legislative procedures.

The Paris deal must be ratified by at least 55 countries representing at least 55% of total global emissions before it can enter into force. The WRI has created an interactive graphic illustrating how these thresholds could be crossed.

The UN’s previous climate agreement, the Kyoto protocol, was signed but never ratified by several countries including the US. The Doha amendment, which set climate targets for the period 2013 to 2020, has still not been ratified by enough countries to enter into force, according to the UNFCCC.

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