The United Nations has declared climate change to be a global emergency. In response to the unprecedented set of challenges posed by climate change, in 2015 UN member nations adopted the Paris Agreement, a legally binding international treaty committing the 196 signatories to the overarching goal of limiting global warming to below 2 degrees Celsius, preferably to 1.5 degrees, compared to pre-industrial levels. National governments around the globe have pledged to make drastic changes in government, economic, and social policy to combat climate change and adapt to its effects. But for businesses big and small, what will this mean? How can businesses adapt and contribute? What will this mean for workers in all sectors and at all levels of the economy?
How Does the Paris Agreement Work?
In order to achieve the reduction in greenhouse gas (GhG) emissions required to limit warming, the Paris Agreement follows a 5-year cycle of increasingly ambitious climate actions to be taken by individual countries. The cycle began in 2020 and will repeat every 5 years moving forward. Countries submit nationally determined contributions (NDCs) to declare steps they will take and benchmarks they will achieve as part of the global goal of reducing emissions and limiting warming. Progress is then measured and recommendations are made for countries to utilize as they make more aggressive climate plans in the next round. Throughout the process, the Paris Agreement also provides a framework for financial, technical, and capacity-building support to countries who have fewer resources and are likely to be more vulnerable to the effects of climate change.
The Role of the United States
Earlier this year, the United States re-joined the Paris Agreement, aligning the climate goals of the federal government with globally recognized best practices for combating climate change. In April, the United States declared its initial NDC – a 50-52% reduction in net GhG emissions below 2005 levels in 2030. The NDC highlights various pathways for emissions reduction including electricity, transportation, buildings, industry, agriculture, land management, and non-CO2 GhG emissions. The submission also discusses the benefits of action, such as reduced levels of pollution, environmental justice, and employment opportunities, while also emphasizing the role that innovation, technology, and private investment must play if the United States is to hit this economy-wide target. The submission states, “All levels of government and the private sector will partner to drive and implement this NDC and create a more equitable, resilient, zero carbon future for the American people.”
The Need for Collaboration
Many corporations view their role in combating climate change as a moral imperative and have acted accordingly. For others, the realities of conducting business in the era of climate change are forcing action. Corporations are gaining a deeper understanding of the operational risks they face, and they are now operating in a world that is both increasingly aware of the effects of climate change and less receptive to businesses that are perceived to be bad actors on climate. In addition to government regulations and tax incentives pushing them to act, corporations are becoming more responsive to advocacy from various stakeholders demanding action--stakeholders including shareholders, employees, customers, communities, and more.
As a result, many multi-national corporations have begun to lead the way to more sustainable business models and practices. As of 2017, over 300 companies have made a commitment by setting science-based targets for emissions reduction with the World Resources Institute (WRI). IKEA now exclusively sells LED bulbs, Ford has invested billions in electric vehicles and charging infrastructure, and Apple is committed to becoming carbon neutral in supply chain and products by 2030. While they may not have the same scale, smaller companies can also take steps toward becoming more sustainable by thinking about their own carbon footprint, adopting sustainable waste management strategies, or encouraging EV adoption, telecommuting, and public transit. Opportunities to make a contribution are everywhere, and it is crucial for actors big and small to understand how each decision we make has an impact.
Where We Go From Here
Achieving the goals set forth in the Paris Agreement is a monumental task, one that will require innovation and collaboration between government actors, private businesses, philanthropic organizations, and other stakeholders. Much is to be done, but, thankfully, we have come so far already. At the end of last year, WRI published an article celebrating progress, specifically noting that over 1,000 large corporations have made pledges to reduce carbon emissions and that trillions of dollars have been invested in renewable energy sources.
Despite the huge challenge that Paris presents, it is important to recognize how even small changes add up to a bigger impact and to use that understanding to further fuel our efforts. At Emerald, our core values provide a framework for everything we do, including being part of the global transformation to limit warming. Of particular relevance to this topic is our core value Eye of The Tiger--we strive to use our technical expertise to help our clients win by helping our clients and their buildings more sustainable.
