How Paris Agreement Impact Global Business

The EU and its member states are among the nearly 190 parties to the Paris Agreement. The EU formally ratified the agreement on 5 October 2016, allowing it to enter into force on 4 November 2016. In order for the agreement to enter into force, at least 55 countries representing at least 55% of global emissions had to file their ratification instruments. While some companies had not yet understood the inevitable transition from the business world to a more sustainable, low-carbon environment, the Paris Agreement should at least encourage high-level leaders to discuss long-term sustainability. Although the climate pact is not available for signature until 22 April 2016 and will come into force at a later date, companies are at risk of falling behind if they do not take into account the impact of the agreement on their sustainable development strategy. What measures should the private sector consider to align business strategies with The Paris legislation? The Paris Pact will enter into force in 2020, when 55 nations, representing at least 55% of global emissions, ratify the agreement at the United Nations in New York. Four years can seem like an eternity in today`s business landscape, where many companies make decisions that soothe investors` short-term approach and where quarterly performance often generates equity volatility. With the Paris Agreement on the horizon, companies in all sectors have begun to recognize the urgency and scale of integrating business sustainable development goals into long-term financial goals. Indeed, the private sector`s presence in the negotiations and its important commitments to combat climate change have been one of the key factors that have contributed to the success of COP21, experts say. “Applicability is not the engine of success,” Dale Bryk, Program Director, Natural Resources Defense Council, said during the discussion on climate baruch. “Even in the case of enforceable agreements, this is often what makes them effective, it is really transparency, communication and accountability, not enforcement.” It will also enable the contracting parties to gradually strengthen their contributions to the fight against climate change in order to achieve the long-term objectives of the agreement.