The 2015 Paris Agreement represented a watershed moment in the global response to climate change. It required countries to commit to Nationally Determined Contributions (NDCs), outlining and regularly revising a strategy for how they will reduce greenhouse gas emissions, as well as adapt to the changing climate.
Building on these commitments, companies and investors are beginning to mobilise to support the objectives of the Paris Agreement. Companies are figuring out how to transition their businesses towards a low carbon economy, as well as improving related reporting and disclosures. Conversely, investors are seeking to understand the environmental strategy and credentials of companies.
Comparison and benchmarking of companies is, however, difficult. The disclosure and quality of reported data on corporate climate targets, greenhouse gas emissions, transition strategies, and other environmental factors remains inconsistent, with large variations between countries and sectors. Policymakers and regulators across the world are also developing diverse frameworks for assessing climate risks, and investors have a vast range of methodologies and approaches available to them to identify opportunities. All of this can add to the existing complexity of financing the low carbon transition.
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