The Paris Agreement: What it means for business
This report summarizes the key details of the 2016 UNFCCC Paris Agreement that affect the private sector, and outlines opportunities for businesses and investors to be a part of the global solution to address climate change. The report notes that the Paris Agreement will have both immediate and long term impacts for businesses. As States transition to a low carbon economy, businesses will be impacted by structural changes to energy, land use and urban systems. While pursuant to the Paris Agreement, States are taking action to build resilience and lower emissions in order to keep warming below 2°C, the report asserts that risks will remain and businesses will need to enhance their own climate resilience. The report provides case studies of how different countries are building resilience in a range of industry sectors as part of their climate adaptation planning.
Climate risks posed to business operations and supply chains are “widespread and material” and include: extreme weather events, temperature variations, droughts and floods, sea-level rise, acidification of soils and oceans, and disease vectors.” Businesses can build climate resilience in various ways, including investments in climate resilient infrastructure, technology and helping to ensure climate resilient communities.
The Report provides examples of how governments and businesses are building resilience in certain business sectors such as textiles, manufacturing, agriculture and insurance. For example, the Bangladesh government is acting to build resilience in its textiles industry, a central part of the Bangladesh economy. Climate change poses various risks to the textiles industry, including increased input risk and financial risk from decreasing supply and/or increasing cost of critical production inputs such as cotton, risks to the integrity of physical infrastructure from flooding, and physical and operational risk from disruptions in labor force. While the Bangladesh government is seeking to enhance the resilience of the textile industry through its national adaptation plan, the report concludes that business must also “look to enhance the adaptive capacity throughout their entire supply chain and pay special attention to the extreme vulnerability of Bangladesh.” The study also considers actions taken by the Mexican government to enhance the resilience of the manufacturing industry, the Ethiopian government in regards to agriculture, and the Australian government in regards to its insurance industry.
Publication Date: 2016
- Policy analysis/recommendations