Climate Change: What are Companies Doing?

Climate change is a global phenomenon that affects not only governments, but also businesses everywhere. This issue impacts all stakeholders of the civil society since they already suffer the effects of climate change and will face the future consequences predicted by the scientific community.

Tomorrow's Economy

We must understand that climate change calls into question our ways of doing things, especially when it comes to the use of fossil fuels on which the evolution and progress of humankind have been built over the last 200 years.

These challenges are so great that they will shape tomorrow's economy. They will lead to the rise of a new economy whose foundations will require a shift from one based on fossil fuels to one based on new decarbonized energy sources.

To prevent an increase in global temperatures that could make life on Earth difficult and painful and compromise the renewable resources that sustain all living species, the international community has set, in the 2015 Paris Agreement, a target of net zero emissions by 2050. The goal of the international community is to ensure the sustainability of the environment that supports life on Earth.

Companies’ Involvement

Climate change is a challenge for companies, requiring them to reflect on their role in the energy transition and in the new decarbonized and sustainable economy.

Businesses will have to consider the changes they need to make regarding their mid and long term role in the economic system and how they can contribute to the transformation of our economy. If properly understood and acted upon, this contribution can and must be a source of innovation and business opportunities that will ensure the sustainability of the business in this changing world.

Redefining a company's mission must be combined with :

• challenging the way things are done;
• strategies;
• operational procedures;and
• working methods.

Businesses also need to track this evolution in order to adapt to the conditions of the energy transition and they must consider ways in which they can deal with these inevitable changes.

Their challenge is to be sustainable and relevant in the new economy that will arise from this evolution.

Do Businesses Have a Choice?

It must be understood that businesses are being driven by the momentum of the international community, by the evolution of scientific knowledge, by the evolution of market expectations and by new laws, regulations and policies adopted by governments.

Despite the inaction of the status quo, it should be recognized that many elements of civil society are seeking these changes and are using not only public rhetoric, but also the legal system to mobilize them into changing how governments and corporations deal with climate change.

As such, as of September 2022, 2,419 lawsuits have been filed in courts throughout the world to petition the judicial system to acknowledge the climate emergency and the need for governments and corporations to act on the findings of the 2015 Paris Agreement.

For more information, feel free to reach out to the lawyers on our business law team, who will be pleased to assist you.