Global Compact International Yearbook 2017

CLIMATE CHANGE
By Sophie von Gagern and Johannes Erhard
Climate change impacts all regions of the world and how businesses
operate. A strategic and holistic corporate approach to
climate action is of increasing relevance for long-term competitiveness,
value growth, and the exploitation of market opportunities.
The climate agreement adopted by 195 countries
in Paris at COP 21 has put climate action on the agenda of more
and more companies. Despite the US administration’s intent
to withdraw from the Paris Agreement, 19 of the 20 leaders
reinforced their commitment to the Paris Agreement at the
G20 summit in Hamburg this year and emphasized that it is
irreversible. The attention is now on the implementation of
the multilateral agreement at national and corporate levels.
Already now, 58 companies have explicitly taken into account
the below 2°C goal in their climate strategies by setting a sciencebased
target for greenhouse gas (GHG) emission reductions.
Almost 300 additional companies have publicly committed
to setting a science-based climate target within the next two
years. The Science Based Targets initiative – a collaboration
between the United Nations Global Compact, the CDP, the
World Resources Institute (WRI), and the World Wide Fund
for Nature (WWF) – provides methods for target-setting in
line with the < 2°C goal, independently assesses and approves
companies’ targets, and provides a communication platform.
The initiative wants to achieve that, by 2020, science-based
target-setting are standard business practice.
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In addition, investors are demanding more transparency
on climate-related risks and opportunities in order to make
better-informed investment decisions. In June of this year, the
Task Force on Climate-related Financial Disclosures – set up
by the G20’s Finance Stability Board and chaired by Michael
R. Bloomberg – published recommendations for consistent,
voluntary climate-related financial risk disclosure. One of the
core recommendations is that companies should describe the
resilience of their corporate strategies and take into consideration
different scenarios, including a 2°C or lower scenario.
A holistic and comprehensive approach to climate change
represents an important step to identify also longer-term risks
and opportunities and react accordingly.
Important steps for corporate climate action
The Global Compact Network Germany has recently published
a handbook with concrete steps companies should follow in
order to continuously improve their climate performance. The
publication focuses on climate mitigation. It includes recommendations
on how to measure, manage, and reduce corporate
GHG emissions in accordance with the GHG Protocol, which
is a widely used global accounting and reporting standard.
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