Last month, leaders from around the world gathered in Marrakesh, Morocco to build on the tremendous achievement of the 2015 Paris Agreement during COP22. There, they recommitted to a collaborative target-driven effort to limit climate change. During the conference, 11 countries—including Italy, Japan, Malaysia, and Pakistan—ratified the Paris Agreement, bringing the total number up to 111, far more than the 55 countries covering 55 percent of global GHG emissions required to elevate the accord to international law. The United States, Canada, Mexico, and Germany released strategies for radically cutting their greenhouse gas emissions by midcentury. The U.S. report outlines plans to meet an 80 percent reduction in emissions from 2005 levels by 2050, referencing an ambitious transition to a low-carbon energy system and innovative carbon storage and removal tactics.

While it is uncertain how the future U.S. political and regulatory climate will respond to these reduction plans, COP22 drove an outpouring of support toward continued involvement by both public and private actors. During the event, more than 190 governments issued strong messages of global unity on climate change, and more than 360 businesses and investors called on U.S. and world leaders to continue to support agreed upon targets to deliver a sustainable low-carbon economy.

This isn’t the first time the business community has voiced its support to fight climate change. Following the Paris Agreement, more than 154 companies joined American Business Act on Climate Pledge and committed to reduce their emissions, increase low-carbon investments, deploy more clean energy, and more. Since that time, many have made good on their pledges through decisive action and innovative programs. JetBlue, for example, has partnered with SG Preston—a bioenergy company—to purchase renewable jet fuel starting in 2017, for at least ten years. Meanwhile, Microsoft has just acquired 237 megawatts of wind energy to power their data centers, bringing their total renewable generating capacity up to 500 megawatts. Disney has become a leader in managing natural resource consumption on a number of fronts including water and energy.

Business is taking on climate change for many reasons: to be an active force for good in their communities; in response to or in expectation of emerging regulations; and because doing so benefits companies in the form of risk mitigation, competitive differentiation, and long-term value creation. Recent research finds that the market penalizes negative environmental performance—such as high CO2 emissions, and rewards investments in positive environmental performance—such as environmental R&D.^[1]

To create programs that will not only deliver these benefits—but that will also contribute meaningfully to global climate goals, many companies are turning toward science based targets. Created in 2014 as a joint initiative between CDP (Carbon Disclosure Project), UN Global Compact, World Resources Institute (WRI), and World Wildlife Fund (WWF), science based targets help companies determine how much they must cut emissions to prevent the worst impacts of climate change.

Once their targets are approved by the initiative, companies work to meet their goals through efficiency improvements, renewable energy purchases, new low-carbon business models, and other business-specific investments. Currently, 196 companies have committed to the initiative’s Call to Action, and have pledged to set and meet science-based GHG reduction targets. Of these, 26 have received approval on their targets, including:

• Dell: reduce GHG emissions from facilities and logistics operations 50 percent by 2020, using a 2010 base-year; and reducing the energy intensity of product portfolio 80 percent by 2020, using a 2011 base-year, and
• Coca-Cola: reduce absolute GHG emissions from core business operations 50 percent by 2020, using a 2007 base-year; and reducing the GHG emissions from drinks 33 percent by 2020, using a 2007 base-year.

It is important to remember however, that goal setting and program development and deployment is only part of the climate change solution. To create the inspiration and momentum necessary to drive global progress, the transparent disclosure of environmental impacts will be required. Here at the Center, we offer a number of resources to help companies at every stage of the disclosure journey. For those looking to learn more about reporting, consider joining us in Scottsdale for our CDP Reporting course or online in January for our next IIRC-approved Integrated Reporting course.

By participating in global movements, setting data-driven targets, and communicating progress, companies can drive significant action toward protecting the planet and create a sustainable and prosperous future.

[1] Lee, K. H., Min, B., & Yook, K. H. (2015). The impacts of carbon (CO 2) emissions and environmental research and development (R&D) investment on firm performance. International Journal of Production Economics, 167, 1-11.

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