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US businesses stand by the Paris Agreement at COP25

David Tong, WWF-NZ

The U.S. government has kept a low profile at this year’s United Nations climate change conference, widely known as COP25. This reticence is no big surprise, given the climate skepticism that has pervaded federal policy under the Trump administration, culminating most recently in the start of the process to formally withdraw from the Paris Agreement. However, in the hive of side activity surrounding the official negotiating halls at COP25, a prominent pavilion called the U.S. Climate Action Center has drawn big-name visitors such as former vice president Al Gore, presidential candidate and former NYC mayor Michael Bloomberg and actor Harrison Ford. 

This venue isn’t connected to the U.S. federal government. Run by environmental group WWF and the We Are Still In coalition, the center showcases the actions of cities, states and businesses, underscoring their resolution to stick to the Paris Agreement.

U.S. businesses in particular have played an enthusiastic role at COP25, which is critical, because the largest corporations in the country are also the largest polluters.

"We’re not going to make it happen without business," said Tim Juliani, WWF’s director of U.S. corporate climate engagement. "We need to be doing a full-court press to address climate change, and businesses will need to be a part of that."

There are tons of American companies who are here ... expressly to share their stories of why and how they are still taking action on climate despite the lack of federal leadership on the issue.
Some business leaders at COP25 were regular attendees of the annual summit, while others were joining the first time. One first-timer was Pedro Pizzarro, CEO of utility holding company Edison International, who came to Madrid to learn and share best practices for taking climate action.

"This is a global challenge, and it will require collaboration and partnership, so that’s why we’re here," he said during an event at the U.S. Climate Action Center.

For many companies, the absence of federal action is a source of motivation. "There are tons of American companies who are here, who have come to the COP for the last couple years, quite expressly to share their stories of why and how they are still taking action on climate despite the lack of federal leadership on the issue," said Jennifer Austin, policy director of We Mean Business.

The private sector can help the US to meet its Paris goals

Businesses are stepping up along with cities and states to fill the climate leadership vacuum that the federal government has left behind. On Dec. 10, Bloomberg Philanthropies launched a report called Accelerating America’s Pledge, which outlines three scenarios for drawing down U.S. emissions. The first is what’s already been committed. The current measures pledged by bottom-up actors are on track to reduce U.S. greenhouse gas emissions by 25 percent by 2030, as compared to 2005 levels.

"If you add up all the work that cities, states, businesses and others are doing in the United States, you can get within striking distance of the 2025 U.S. target under Paris," said Elan Strait, manager of the We Are Still In Coalition, referring to the United States' nationally determined contribution as part of the Paris Agreement.

Further action from states, cities, and businesses could expand those reductions to 37 percent, and an "all-in" scenario with ambitious action from the U.S. government after 2020 — implying a new presidential administration — could reduce emissions as much as 49 percent. This scenario includes top-down policies that enable decarbonization across sectors such as energy, transportation and land use, as well as increased bottom-up support. Only the all-in scenario would meet the goals of the Paris Agreement by 2050.

"It’s remarkable how much can be done in the near term to reduce emissions," said Strait. "But if you think about the long-term, you need a national government that’s engaged."

It’s remarkable how much can be done in the near term to reduce emissions ... But if you think about the long-term, you need a national government that’s engaged.

Setting ambitious targets, based on science

One way that companies can make sure they’re doing their part to reach the goals of the Paris Agreement is to set science-based targets, which are calculated based on the global carbon budget and a company’s specific contributions to climate change.

At COP25, the Science-Based Targets initiative released its first progress report (PDF), which highlighted that 686 companies have joined and 285 have gotten approval on their targets, and those numbers continue to grow. On Dec. 3, agriculture giant Cargill announced that it was the latest company to set an approved science-based target.

LafargeHolcim, the world’s largest cement manufacturer, has set targets but they’re not yet aligned with the company’s science-based obligations. Magali Anderson, the company’s chief sustainability officer, recognized the need to continue scaling up ambition, but she also noted the initial goals laid a foundation for further action. 

"It’s something that we really wanted to put in concrete, if I can say that," she joked.

If companies want to go further with their goals, they can set targets aligned with a 1.5 degree Celsius rise in temperature, the more ambitious target mentioned in the Paris Agreement and a critical benchmark beyond which climate risks intensify, according to the Intergovernmental Panel on Climate Change. At COP25, a set of 177 companies announced that they would pursue targets in line with this more ambitious limit.

Austin called these companies "the tip of the spear of the growing business movement working to set emissions reduction targets."

Businesses cannot succeed in societies that fail.

From targets to action

Even the most ambitious targets are not enough on their own. Juliani pointed out that vastly more companies would need to set science-based targets in order for the planet stay within its carbon budget, and after setting targets, they still need to follow through and meet them in a way that’s effective and transparent.

Companies also have opportunities to create impact outside of their own operations and supply chains, by engaging their consumers and influencing policy. 

"The fact of the matter is, no matter what any of our companies do, we have to look beyond our four walls to really scale up to get to those solutions that we need," said Michelle Patron, sustainable policy director at Microsoft. 

Kevin Kennedy, a senior fellow at World Resources Institute, also emphasized the need for companies to influence policy, particularly at the federal level. "Making it known to the folks in Congress that the business community is in support of moving quickly on climate policy is going to be incredibly important," he said.

At a COP25 event "Adaptation: A Business Imperative," María Mendiluce of the World Business Council for Sustainable Development made the point that in the long run, addressing climate change is in every company’s self-interest. 

"Businesses cannot succeed in societies that fail," she said, before describing the need for the public and private sector to work together on building resilience. "The biggest risk that companies face is the risk of inaction."

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