The business case for the Paris Agreement

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Since President Trump announced his decision to withdraw the United States from the Paris Agreement, we have witnessed an unprecedented response from local, state, and corporate actors. In the subsequent 24 hours, dozens of companies—including Disney, General Motors, and Apple—and scores of state and local officials pledged continued commitment to the plan. Bloomberg founder and CEO Michael Bloomberg offered to contribute the $15 million dollars that the United States otherwise would have to the operating budget of the United Nations Framework Convention on Climate Change. In California, Governor Jerry Brown committed to continue talks with China to connect the country to the state’s cap and trade program, which is already linked to Quebec.

This collective action may be surprising to some, but for those of us who work closely with companies as they address the environmental, social, and governance (ESG) aspects of their businesses—what we call corporate citizenship—it is expected. Companies have for decades been evaluating the impacts of climate change on their operations and on the stability of the global markets with which they are intertwined. 

The business community was heavily involved in advocating for the Paris Accord in 2015, as well as the United Nations’ Sustainable Development Goals (SDGs), which seek to combat climate change and the social ills that accompany it. The savviest companies have aligned their corporate citizenship efforts with these objectives, and have set ambitious targets to ensure that our planet does not warm 2 degrees Celsius above pre-industrial levels. This is what climate scientists agree will be our best hope of preserving life on this planet as we know it, and what the Paris Agreement hopes to achieve.

Companies’ continued commitment to addressing climate change is reflective of their larger context and purpose. Long-term success requires an eye toward sustainable growth. This is both an exercise for companies in risk mitigation and an opportunity for innovative differentiation.

While political systems swing on a pendulum of election cycles, business must look beyond those cycles to the more consistent demands of global stakeholders. Shareholders are increasingly looking for long-term value creation and good risk management. Consumers are searching for environmentally friendly options and corporate accountability. Our workforce, increasingly, wants to understand how they can do good and do well.

Last year, I had the privilege of working with the Global Reporting Initiative (GRI), and leaders from companies like CEMEX and Mosaic to create the GRI 2025 project—a look ahead at the issues that would define corporate citizenship in the coming decade. Our research found, unsurprisingly, that climate change, and the social and environmental ramifications of it—such as food and water security, natural resource management, and waste and containment control—would be one of the most pressing challenges that executives will face in the future.

What was unexpected was that across all stakeholder groups—North American and EMEA corporate leaders and Global NGO executives—the expectation was pronounced that corporations would lead on many of the potential solutions to these problems. By investing in environmental efforts now, companies are investing in a stable society that can support economic growth. They have the know-how and the incentives to mobilize the initiatives required to achieve forth

At the Boston College Center for Corporate Citizenship, we support the work of the men and women leading these important efforts in more than 430 companies. In my time with them, I have seen first-hand the incredible results that can be achieved when the innovative spirit of business is brought to bear on our world's challenges. From internal carbon pricing to renewable investments, from LEED-certified facilities to biodegradable packaging, companies are already charting the path toward a low-carbon future. They are making these investments not only because they benefit society in the long term, but because they are delivering cost savings NOW. 

Corporate citizenship efforts deliver business and social value. Companies comprise not only the world in which we do business, but they also influence to a large degree the world in which we live. As the world determines its new course toward meeting the Paris Agreement, the business community has issued a clear edict: The corporate citizens of the United States will do its part in creating a low-carbon future. Not only because it is the right thing to do, but because the business case is clear. We must have a healthy natural environment to have a healthy society; we must have a healthy society to have a healthy economy. This is important for companies and for us all.

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