Time for action: Why leading businesses should care about the Paris Agreement

Over the next few years, the Paris Agreement will increasingly shape how companies are regulated, how they report, and how they are judged by investors and customers. 

For business, this is both a risk and an opportunity: a risk if action is delayed, and an opportunity to future-proof strategy, manage risk and unlock value in ways that deliver for climate, people and nature.

We will explore this further in our upcoming webinar, Carbon Markets NextGen: Delivering Integrity, Accessibility and Scalability, examining how evolving carbon markets can support credible, Paris-aligned corporate action.

Paris is becoming the reference point for policy and markets 

Governments are translating the Paris Agreement into law. The European Climate Law, Canada’s Net-Zero Accountability Act, New Zealand’s Zero Carbon Act, and similar legislation in Chile, Japan and South Korea all translate it into binding requirements. 

Not every company is affected yet. But the direction is clear: Paris is increasingly a reference point connecting business strategy with the rules shaping how companies operate. Aligning with it means ensuring targets, strategies and claims are consistent with the 1.5°C pathway used by governments, and standard setters.   

Climate risk is becoming business risk 

With the latest World Meteorological Organization findings indicating that global temperatures are likely to be 1.2°C–1.9°C above pre-industrial levels between 2025 and 2029, financial impacts of climate change are no longer hypothetical. Paris-compatible planning will increasingly become the benchmark investors and regulators use to judge whether companies are prepared. Climate change can influence: 

• Operations, through disruptions to assets and supply chains. 
• Cost of capital, as investors factor in transition and physical risks. 
• Market access and reputation, where, particularly for companies with consumer, investor or regulatory exposure, Paris-aligned expectations are already informing disclosure, target-setting and claims.  

Climate strategy is therefore shifting from corporate responsibility to mainstream risk management and financial planning. 

What does “aligning with the Paris” actually mean? 

Paris alignment can sound abstract. In practice, companies can take three actions now: 

1. Set targets based on science and consistent with the Paris Agreement. 
   Use science-based methodologies rather than arbitrary pledges. The Science Based Targets initiative (SBTi) reports a 97% increase in the number of companies setting science-based targets in the last 18 months, reflecting growing demand for credible transition plans. It’s evolving Net-Zero Standard requires companies to align near-term and long-term targets with the Paris Agreement’s 1.5°C pathway. 
2. Use robust transition plans to deliver those targets, prioritising decarbonisation of operations and value chains. 
3. Address ongoing emissions with high-integrity, Paris-aligned climate contributions, such as carbon credits. Initiatives like the Integrity Council for the Voluntary Carbon Market (ICVCM), the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the emerging Paris Agreement Crediting Mechanism (PACM), and Gold Standard’s own standard, are all evolving to reflect these requirements. Credits offer a tangible way to contribute but are not the only way of investing in climate impacts – see Gold Standard’s Beyond Value Chain Mitigation Guidance for more details on how to prioritise investments for ongoing emissions. 

Why early movers benefit 

Paris alignment is not simple. Data limitations, evolving rules and sector-specific constraints remain. But importantly, the tools, standards and technologies needed to deliver credible climate strategies already exist. The task now is to apply them with discipline and scale. Proactive action can help manage risk, build credibility and avoid costly adjustments later. 

Your board may not yet be explicitly asking for Paris alignment, but they are asking for sustainability strategies that are credible, realistic, and future proof. Using Paris as a reference point helps ensure that they are and helps avoid costly adjustments later. 

What Gold Standard is doing 

At Gold Standard, we translate the key principles and requirements of the Paris Agreement into actionable steps for companies. Our Climate Responsibility Framework provides a practical pathway for aligning corporate climate strategies with the Paris goals. Our standard, guidance and tools are being updated to be fully consistent with the Agreement, so that climate contributions are credible, measurable and aligned with a 1.5°C world. 

A new normal 

The companies likely to thrive in coming decades are those that treat commitment to net zero trajectories as a matter of good governance and financial planning. By integrating climate considerations into how they manage risk, meet obligations, and create long-term value, companies can help shape, and benefit from, the opportunities in the coming transition. 

Join our upcoming webinar, Carbon Markets NextGen: Delivering Integrity, Accessibility and Scalability, to explore how next-generation carbon markets are evolving to deliver integrity at scale, improve access, and support companies in aligning with the Paris Agreement in practice.