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Opinion: The Paris Climate Agreement - Global Supply Chains to the Rescue

On June 1, President Trump announced that the U.S. was withdrawing from the Paris Agreement on Climate Change. This treaty committed the U.S. - and 194 other countries - to reducing rising global temperatures.

Many of the largest companies in the world have embraced sustainability. In 2016, just 18 percent of the S&P 500 were not publishing sustainability reports. Companies approach sustainability in different ways. Sustainability includes both social and environmental issues. However, when I was researching this area a few years ago, I saw a high proportion of companies embracing carbon emission reductions, at least within the part of their end-to-end supply chain that they controlled. Companies who have made public commitments to reduce their carbon footprint are unlikely to back out of those commitments.

In an interview with Pierre-François Thaler, co-CEO of EcoVadis, I asked if he had the same impression. EcoVadis is the leading platform for environmental, social and ethical performance ratings for global supply chains. Thaler believes that among the Global 500, this announcement may cause some of these companies to accelerate their efforts in this area.

This makes sense. In the current environment, a company making a new commitment to carbon dioxide reductions could be viewed even more positively than they usually would be for such an initiative.

“My concern,” Thaler said, “is midsized U.S. companies focused on serving the domestic market will see no reason to address this issue.”

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