Additional Information
The Earth has already warmed by approximately 1.1°C since the late 1800s, with emissions on the rise. To adhere to the Paris Agreement's goal of limiting global warming to 1.5°C, a 45% reduction in emissions by 2030 and reaching net zero by 2050 is crucial.
Countries with Nationally Determined Contributions (NDCs) may have stricter emission reduction goals under the Paris Agreement. This could necessitate significant operational changes for companies operating within those nations to comply with national regulations.
Failure to meet regulations or surpass emission limits may lead to fines and harm a company's reputation among environmentally conscious consumers and investors.
- Our Planet is Heating Up: Earth's temperature has already risen 1.1°C compared to the late 1800s, and greenhouse gas emissions continue to climb.
- Stricter Regulations: Countries Nationally Determined Contribution (NDCs) might have stricter emission reduction goals under the Paris Agreement, forcing companies to change operations. Examples include:
- CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation): Airlines are required to offset CO2 emissions exceeding baseline levels on international flights.
- Singapore Carbon Tax: Companies in Singapore emitting more than a certain threshold of greenhouse gases must pay a tax on their emissions.
Source: The Paris Agreement
- CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation): Airlines are required to offset CO2 emissions exceeding baseline levels on international flights.
- Singapore Carbon Tax: Companies in Singapore emitting more than a certain threshold of greenhouse gases must pay a tax on their emissions.
- Rising Investor Focus on ESG: Environmental, Social, and Governance (ESG) factors are increasingly important to investors. Companies with high carbon footprints may face difficulty attracting investment. Examples of ESG reporting factors include:
- Scope 1, 2, and 3 Emissions: Companies are increasingly reporting on their direct (Scope 1), indirect energy-related (Scope 2), and indirect value chain (Scope 3) greenhouse gas emissions.
- Climate Change Risks and Mitigation Strategies: Investors are interested in a company's understanding of climate change risks to its operations and its plans to mitigate those risks.
- Net Zero by 2050: Scientists say we need a 45% reduction in greenhouse gases by 2030 to reach net-zero emissions by 2050 and avoid severe climate impacts.