2015 looks like it will be the warmest year on record yet. Atmospheric concentrations of carbon dioxide have reached a new high passing the symbolic 400 parts per million threshold.  Climate change is happening here and now.

Set against this depressing backdrop, COP21 has provided us with some hope.  But what does the wide-ranging Paris Agreement mean for business?

• Be prepared for more regulation, guidance and support
• Review your internal policies and procedures
• Get ready for carbon pricing
• Review the information that you provide to investors and other stakeholders
• Learn to adapt
• Expand your networks

Be prepared for more regulation, guidance and support

Firstly, and perhaps most obviously, businesses can expect to see more climate change-related regulation, guidance and support from signatory Governments. By establishing a clear, long-term goal to achieve zero overall global emissions in the second half of this century, Governments have irrevocably committed to decoupling economic growth from fossil fuel use. This will require a comprehensive and joined-up approach to energy, resource efficiency and transport strategies and policies. Inevitably, this will lead to changes in current regulatory regimes. Anticipating these will be critical to doing business in a carbon-constrained economy.

Review your internal policies and procedures

Companies need to review their own policies and procedures to see that they are aligned with the aspirations of the Paris Agreement. For example, are your greenhouse gas targets aligned with the net zero trajectory? Have you got sufficiently robust environmental due diligence mechanisms in place to properly assess projects and acquisitions? Are you well positioned to take advantage of new investment opportunities and funds? Have you correctly risk assessed your supply chains? These are just a few of the questions that should be demanding more attention following Paris.

Get ready for carbon pricing

Hidden away in paragraph 137 of the Paris Agreement, carbon pricing is promoted as an important tool in tackling climate change. More than 1,000 businesses have already told the Carbon Disclosure Project that they are expecting to integrate an internal carbon price into their business planning over the next few years. How to do this in a cost-effective manner whilst still incentivising reductions is something that Anthesis has addressed with their ‘Cool Pricing’ framework.

Review the information that you provide to investors and other stakeholders

With their longer term perspective, investors have naturally been at the forefront of climate action as they seek to reduce climate risk in their portfolios. The CDP have seen a twenty-fold increase in investors seeking company environmental information. Understandably, investors want to reduce their exposure to high carbon investments. In addition to the investor community, it is also important to review the quality and completeness of the information you are providing to your wider stakeholder community who will also have an interest in how you are transitioning your business. Necessarily, the provision of transparent, accurate and relevant information will need to be underpinned by appropriate data management systems.

Learn to adapt

Do you have a robust climate adaptation strategy? This is not only key to business continuity but also impacts on future markets for your goods. For example, is your new product development process up to the task? Climate change is one of the six global mega-trends identified in a recent report from the BITC, Forces for Change, which together demand a coordinated business response.  And Anthesis' RiskHorizon™ also offers users  the opportunity to evaluate future risks they may be exposed to.

Expand your networks

Finally, tackling climate change will require more collaboration, innovation and engagement up, down and across supply chains. Now is not the time to be operating in a silo – but to be open to new ideas and opportunities. Expand your networks! Shining examples include the Tesco Supplier Network, which provides unprecedented information sharing between buyer and suppliers and the Cool Farm Alliance – a pre-competitive group of producers, brands and retailers who have together funded a free tool for farmers to help them reduce their greenhouse gas emissions.

In Conclusion

Paris may not have delivered everything that climate change activists have dreamt about but, similarly, it has not been the nightmare we all dreaded. It provides a clear direction of travel and the level playing field that is so essential to underpin investment in a low carbon economy. For that we should all be grateful.

Contact Chief Technical Advisor, Craig Simmons (craig.simmons@anthesisgroup.com), for more information on Anthesis’ climate change-related services and software offerings.