The Paris Agreement on climate change is here to stay and businesses should begin considering its implications in their business plans, the University of Cambridge said in a report Tuesday. The report helps break down what the agreement means for the private sector and how companies should respond. “Whilst the impact of the agreement will vary from industry to industry and across geographies, there are common themes and an overall new context for change, which apply to all business,” the report says.
Four areas of the Paris Agreement will have a lasting impact and companies across all industries, the report says. First, the agreement identifies a “clear and long-term” path forward by setting an international goal of limiting global temperature rise to “well below” 2 degrees Celsius. The accord further provides confidence in that path by creating a five-year review cycle that requires states to increase the ambition of their climate change mitigation commitments. Third, the agreement clearly illustrates that there is a universal political consensus in tackling climate change. Finally, it levels the playing field for all countries, the report says. “It includes a move towards a common methodology for country progress reports, which are required every two years, and improved standards for measurement, management, and disclosure,” the report explains.
Considering these four areas, “[c]ompanies now have a strategic choice between being part of a well-planned and managed global transition or being subject to a more disruptive transition – both at the company and broad economy level,” the report says.
