In an historic move, 195 countries met in Paris in December 2015 and committed to limit global warming to „well below” 2°C above pre-industrial levels and to pursue efforts to keep it to 1,5°C. The Paris Agreement, which officially comes into force in 2020, sends a clear and unequivocal signal to the private sector: a global political intention to shift to a low carbon, and ultimately zero carbon, future. If the goal agreed in Paris is to be achieved it will require a transformation of global energy systems, transport and industrial processes over the next few decades. Businesses face both risks and opportunities in this transition since they must deliver the bulk of the necessary emissions reductions and investment.
But what will this mean for business? KPMG predicts that overall the global economy will evolve to a low carbon model, by increasing investment in clean technology and by the emergence of an international carbon market. We predict that investors will look more closely at climate-related risk and opportunity, as pressure will grow for businesses to set 2°C targets. For more details and about what businesses should focus on a post COP21 world, please read KPMG’s Briefing on the outcome of COP21.