New analysis of Paris Agreement identifies market opportunities as more companies move to take bold climate action
A new analysis, ‘What Paris means for business’ published today, just hours before world leaders convene at the United Nations to sign the historic Paris Climate Agreement, highlights market opportunities worth trillions of dollars arising from the agreement and urges the private sector to take action now and bring clean energy and prosperity to all.
Experts from We Mean Business – a coalition of organizations working with thousands of the world’s most influential businesses and investors – have analyzed the details of the Paris Agreement to identify key policies relevant to global business and translated it into an accessible form for a private sector audience.
All major economies are committing to restructuring their energy systems, changing transport patterns, and transforming infrastructure, buildings and land use. Collectively, the national climate plans under the Paris Agreement represent at least a US$13.5 trillion market for the energy sector alone in energy efficiency and low-carbon technologies through 2030.
Edward Cameron, Head of Policy for We Mean Business said:
“Paris is an unprecedented international agreement and a defining moment for the global market. The governments of the world have spoken with one voice and have committed to decarbonizing the global economy during this century. Trillions of dollars of market opportunity await businesses with the foresight to lead across their entire value chains. The We Mean Business campaign provides the platform for business to seize this market.”
The analysis provides insight into what companies should expect as the economy undergoes a deep transformation post-Paris. It includes:
· New and expanded market opportunities
· Opportunities to align investment decisions to long-term policy certainty
· Benefits from policy coherence across borders and into new markets
· Increased investor confidence in managing climate risks
The volume of private sector climate action is accelerating fast. Fifty one new leading global companies, making sixty two separate commitments, including Aveda, Peugeot Citroen, Bloomberg, Tiffany & Co, Ferrovial, Sky, HP, Toyota and many more, have joined the We Mean Business coalition in the immediate aftermath of the Paris Agreement, recognizing the agreement’s immediate and long-term implications for business operations, supply chains, investor preferences and consumer demand in the global marketplace. They are taking implementation steps like powering their operations with 100% renewable energy, using an internal price on carbon, and setting science-based emissions reduction targets. Leading businesses taking strong climate actions benefit from an average 27% internal rate of return on low-carbon investments. A full list can be found in Notes to Editors.
· The UNFCCC’s Nazca Portal contains over 4,000 commitments by companies, cities, subnational regions, and investors to address climate change.
· 397 companies with total revenue of $7.9tn & 183 investors with AUM in excess of $20.7tn have made 951 commitments through We Mean Business
· 58 companies have committed to procure 100% of their electricity from renewable sources in the shortest practical timescale through RE100.
· 147 companies, an additional 33 since COP21, have either set or have committed to setting science-based emissions targets through the Science Based Targets initiative; this commitment is one of the commitments upheld by We Mean Business.
Global businesses already at the forefront of climate action such as Google, Ikea and one of India’s largest conglomerates, Mahindra & Mahindra, have continued to push ahead with new initiatives to further invest in clean energy and new technologies as a direct result of the successful Paris Climate Agreement.
Anirban Ghosh, Chief Sustainability Officer, Mahindra & Mahindra said:
“As we strive to keep average temperature rise well below 2C, we must stretch every sinew to enhance energy productivity, an increasingly expensive resource. Mahindra is delighted to become a part of EP100, a program that drives breakthrough energy productivity. The heightened conversation on sustainability has led to the incorporation of climate change related risks in the risk registers of the different Mahindra Group businesses.”
Steve Howard, Chief Sustainability Officer, Ikea said:
“Everyone, including policymakers, business and civil society, needs to work together in delivering actions and solutions that facilitate a rapid transition to a low carbon economy. At IKEA, we are committed to do our part. We will continue to invest in renewable energy and to transform our business. By 2020, we will produce as much renewable energy as the energy we consume in our own operations.”
Michael Terrell, Head of Energy Policy, Google Inc. said:
“Companies are making big bets in clean energy to fight climate change and because it makes business sense. At Google, we have committed to purchase over 2 gigawatts of renewable energy and are the largest non-utility renewable energy purchaser in the world. We believe we can tackle climate change in a way that will spur innovation and growth and benefit us all.”
In a further show of support for the Paris Climate Agreement, over 100 business giants have called for swift action on the U.S. Environmental Protection Agency’s Clean Power Plan and investment in the low carbon economy at home and abroad.
The companies, including IKEA, Mars, PG&E, Salesforce, General Mills, Kellogg’s, HP, and Starbucks released a statement organized by a coalition of groups, including the nonprofits Ceres and World Wildlife Fund, during a teleconference today.
In the statement, the signatories pledged to do their part to “realize [the Paris Climate Agreement’s] vision of a global economy that limits global temperature rise to well below two degrees Celsius.” They also called on U.S. leaders for an investment in the low-carbon economy at home and abroad to give financial decision-makers clarity and to boost investors’ confidence worldwide.
Barry Parkin, Chief Sustainability Officer, Mars said:
“We are hopeful that continued leadership and progress by the business community will encourage the U.S. to follow through on its COP21 commitment and to successfully implement the Clean Power Plan.”