Paris Agreement: Definition

The Paris Agreement is the international climate treaty adopted at COP21 in December 2015 and in force since November 2016. Almost every country has signed it.

What it commits countries to

• Hold global warming to well below 2°C above pre-industrial levels and pursue efforts to limit it to 1.5°C.
• Submit national climate plans, called Nationally Determined Contributions (NDCs), and strengthen them every five years.
• Report progress transparently and take stock of collective progress through the global stocktake.

Australia’s commitments

Australia’s NDC commits to a 43% cut in emissions below 2005 levels by 2030 and net zero by 2050, both legislated in the Climate Change Act 2022. The government has also set a 2035 target range.

Why a treaty between countries matters to companies

“Paris-aligned” has become the benchmark for corporate targets. The Science Based Targets initiative (SBTi) validates company targets against 1.5°C pathways, and AASB S2 asks companies to disclose whether their climate targets were informed by the latest international agreement on climate change. Scenario analysis under AASB S2 also typically includes a 1.5°C-aligned scenario. Saying a target is “Paris-aligned” without a pathway or validation behind it is a claim regulators increasingly test.