The Paris Agreement — It’s Down to Business

Climate change is topping the list of issues we face as a generation. Its urgency was acknowledged at the historic UN conference in Paris in December — the 21st annual United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties, aka COP21. A total of 195 countries — many of them oil-rich economies — committed to keeping the global temperature increase to well below 2°C, and ideally 1.5°C, above pre-industrial levels.

The Paris Agreement signals the end of the fossil fuel era. It shifts the entire world economy, and it has huge implications for business. The transition to a net zero carbon economy starts now. Governments have committed to climate goals, but the scale of the transition required is such that governments can’t do it alone. We need business to fully commit too.

Before Paris, the world saw unprecedented numbers of private-sector businesses commit to climate goals of their own — 2,043 corporate commitments were registered on Non-State Actor Zone for Climate Action, and 1,200 organizations signed the Paris Pledge for Action. But we also saw plenty of private-sector inaction on a global scale.

And how many of the thousands of corporate pledges were just greenwash — companies seizing the opportunity to affirm environmental goodwill without putting a lasting commitment behind it? Where should the public and shareholders seek reassurance that those promises will be upheld?

If we’re to make real progress in the wake of Paris, we need the COP21 commitments to resonate through both state and corporate policy.

A company’s successful transition to a net zero carbon economy should be central to its planning. It should influence executive remuneration, dictate board members’ decisions, and determine a company’s ability to compete in the investor and consumer marketplace. Too few companies are doing this — or even aspiring to it.

So how can we make sure Paris lives on, loudly, in company decision making?

In the United Kingdom, a company’s governing documentation is called its constitution and is made up of both its articles of association and any special resolutions passed by the company in general meetings. The constitution lays out the principles that the organization must adhere to as well as its objectives. The company, and its management, must follow these governing principles.