P
Paris Agreement
Definition
The Paris Agreement is the legally binding international climate treaty adopted at COP21 on December 12, 2015 and entered into force on November 4, 2016 under the UN Framework Convention on Climate Change (UNFCCC). Its central aim is to limit global average temperature increase to well below 2°C above pre-industrial levels and pursue efforts to limit it to 1.5°C. Parties (countries) must submit Nationally Determined Contributions (NDCs) and progressively strengthen them every five years. The Paris Agreement’s Article 6 establishes international carbon markets. Net zero GHG emissions globally by mid-century is required to achieve the 1.5°C goal.
Source
Paris Agreement (UNFCCC, December 12, 2015, entered into force November 4, 2016); IPCC Sixth Assessment Report (AR6); COP29 Baku outcomes (November 2024).
Practical Explanation (Compliance Context)
The Paris Agreement provides the policy context and temperature targets that underpin all science-based corporate climate strategies. Companies setting SBTi-validated targets, disclosing under IFRS S2, or preparing ESRS E1 climate disclosures must align their transition plans with 1.5°C-compatible pathways. Investors, insurers, and regulators reference Paris Agreement alignment as the key criterion for credible corporate climate action.