COP29: key outcomes for board directors

COP29: Sizing up climate finance gaps and national ambition levels

From 11 to 22 November 2024, leaders from nearly 200 nations met in Baku, Azerbaijan for COP29 – the second largest-ever UN climate summit. Billed the ‘finance COP’, COP29 negotiations centred on progressing a new climate finance goal to support developing countries in delivering international commitments to address climate change.

UN Secretary-General, António Guterres, opened the negotiations with a direct call to action, stating that global emissions must be cut by 9% every year and that by 2030 they must fall 43% from 2019 levels. Guterres also set out how the gap between climate adaptation requirements and supporting finance could reach up to $359 billion USD a year by 2030, and that developed countries must double adaptation finance to at least $40 billion USD a year by 2025 in order to fill this gap.  

Further setting the scene, the World Meteorological Organization (WMO) released its State of the Climate 2024 on the opening day of COP29, reporting that 2024 is on track to be the warmest year on record. The state of global affairs heading into negotiations, including the result of the US election and the potential precedent set for a deceleration of US climate policy, brought into focus the real risks facing Paris Agreement ambitions. A central theme across this year’s negotiations was taking stock of how a 1.5°C Paris-aligned future is still within reach.  

Key outcomes of the negotiations include: 

• Agreement of the New Collective Quantified Goal (NCQG) to triple climate finance to developing countries, representing an increase to $300 billion USD annually by 2035. This was a heavily negotiated issue, with the final amount coming out well below the $1.3 trillion requested by some developing countries. 
• Agreement on international carbon market standards. Approval of Paris Agreement Article 6 standards in relation to bilateral agreements between countries (Article 6.2), carbon crediting mechanisms (Article 6.4), and adoption of non-market approaches (Article 6.8), which focus on other types of cooperation that can be used to incentivise and scale carbon finance. This agreement is an initial step and many details are still to be worked through. 
• A degree of progress on Loss and Damage financing. Negotiations saw the signing of key documents for the Fund for responding to Loss and Damage, with first official contributions pledged. 
• Updated Nationally Determined Contributions (NDCs) announced: A limited number of updated NDCs were announced, signalling countries’ commitment to more ambitious emissions reductions targets. 
  • Remaining countries’ new NDCs are due by March 2025 and can be found via Climate Watch’s NDC Tracker as they are announced. 
  • A related outcome is the Baku Declaration on Global Climate Transparency, which offers a platform for signatory countries to submit their Biennial Climate Transparency Report (BTR) and National Inventory Report (NIR) by 31 December 2024. Efforts to better standardise national transparency reporting present benefits to the private sector, in terms of providing clearer signals of climate ambition and the policy interventions needed to deliver it – which may help set COP30 negotiations up for evidence-based assessment of Paris Agreement progress. 
• Failure to agree how to carry forward the COP28 UAE dialogue and the commitment to transition away from fossil fuels – shunting the decision to COP30 in Brazil next year. 
• Part of the COP29 Presidency’s ‘Action Agenda’, the COP29 Global Energy and Storage Grids Pledge commits signatory countries to increasing global energy storage capacity by six times above 2022 levels, reaching 1,500 gigawatts by 2030. 

COP29 Scorecard: Progress at a glance 

The scorecard offers a summary of the most relevant announcements or actions taken at COP29. Please see the ‘Further Reading’ section for policies and announcements relating to the scorecard outcomes. 

Key messages for board directors 

• Untangling global climate finance – in terms of what forms it takes, when it is needed, how it is evaluated, where it flows, and who is most responsible for delivering it –remains a critical and significant challenge. 
  • Tensions throughout COP29 negotiations have centred around many of these unresolved issues in global climate finance policymaking. Despite ongoing political debates, there is a real opportunity for board directors to proactively support their organisations’ expenditure and investment decisions that mobilise private sector capital for climate action, and that also help to demonstrate needed reforms to international finance architecture.
  • The agreement of the NCQG and the commitment to triple climate finance includes a focus on securing efforts from the private sector to “work together to scale up finance to developing countries,” to the amount of $1.3 trillion USD per year by 2035. Considering that historic blended finance mobilisation ratios measure $1 of public finance to 40 cents of private capital, greater public-private partnership may lead to more balanced finance flows. 
  • Board directors should consider how their organisations’ approaches to mobilising private finance align with the forms and levels of investment from public finance institutions. The first global net-zero alliance comprising public finance institutions, the Net-Zero Export Credit Agencies Alliance (NZECA), published its Target-Setting Protocol - the first tool aimed at enabling export credit agencies and export-import banks to set net zero targets and accelerate climate action. Such tools aim to mobilise private finance through instruments like guarantees or co-investments, which help to de-risk investing in emerging markets and technologies.
  • Board directors are well-positioned to identify potential vulnerabilities that exist in organisations’ current value chains. Greater transparency of finance flows is critical to understanding how to address barriers and inefficiencies in transitioning towards climate-aligned business models. 
• The approval of new international carbon markets standards has a range of implications for businesses. Official rules were adopted for the Article 6.4 (a UN-mandated central carbon market) and Article 6.2 (decentralised emissions trading by countries) mechanisms of the Paris Agreement, including a standard for the development and assessment of methodologies for carbon removal activities. 
  • With greater clarity on definitions and principles, there is expected to be “fresh demand for carbon credits” and increased movement in carbon trading between countries. 
  • These developments offer board directors an opportunity to reflect on strategic positioning on carbon markets for their organisations, to identify where practices could be introduced or adapted to improve alignment with new UN-backed operating standards. 
  • There are linkages to transition planning in accounting for the role of carbon offset and removal technologies in achieving corporate climate objectives—particularly as recent research finds that over 80% of carbon credits issued by more than 2,000 projects have a much lower climate impact than they claim.
  • Various organisations have pushed back against the new rules, due to concerns that they “conceal many problematic fundamental and technical issues that remain unresolved.” Continued debates around how these rules are operationalised in practice are likely going forward, and board directors may wish to stay informed on how these play out.
  • Further information on carbon markets policy is available in the Climate Governance Initiative’s Carbon Pricing Navigator. 
• Increased business ambition and action on climate – both in terms of emissions reduction and resilience – was an important focus at COP29.
  • The MSCI Sustainability Institute’s Net-Zero Tracker finds that companies are on course to deliver an emissions reduction trajectory tied to a 2.8°C scenario, with almost two-thirds of listed companies (62%) significantly overshooting the 1.5°C ambition of the Paris Agreement. This could result in listed companies burning through their share of emissions budgeted for the 1.5°C ambition by November 2026.
  • Such data points to a clear imperative for organisations to reflect on emissions reduction budgets and timescales. Board directors should consider how existing corporate climate transition planning is set to deliver on real-world emissions reductions, and whether the organisation’s ambition levels must be raised.
  • Negotiations highlighted the new International Transition Plan Network (ITPN) as a means through which “to encourage the emergence of national and international approaches to transition planning and to serve as a platform for partnerships that support the creation of new frameworks and strategies for private sector transition plans.” Created following the conclusion of the Transition Planning Taskforce, board directors may consider how this platform can provide useful direction to strategic discussions on credible transition planning.
  • There are signs of progress, with the 2024 update of the Race to Resilience campaign showing that climate adaptation action plans now cover 2 billion people, with organisations across 164 countries participating in the campaign. Emphasis remains on scaling up these efforts, with the new pledge to increase the resilience of 3.2 billion people by 2030. 
• COP29 emphasised effective implementation of international standards as key to advancing corporate climate governance.
  • The International Organization for Standardization (ISO) unveiled new international ESG guidance at COP29, ISO ESG Implementation Principles, to support compliance with disclosure requirements and improve ESG reporting and communications. The guidance particularly targets improving ESG reporting and practices for SMEs, considering that these constitute a significant portion of the world’s businesses and are disproportionately impacted by climate change.
  • Board directors may consider how ISO’s principles currently fit within organisational ESG practices, and whether there are opportunities to better embed these principles at the strategic level.
  • With ESG regulations having reportedly risen 155% in the last decade globally, guidance on how to better harmonise existing ESG principles and approaches can be of real benefit for organisations looking to improve consistency and reliability across their climate reporting. 

Looking to the year ahead 

Significant attention has been paid to COP30, which will take place in Belém, Brazil in November 2025, as this represents a "critical milestone" by which all countries will have submitted their updated NDCs. The choice in Brazil as a host country is also significant, offering an opportunity to bring global attention to the challenges unfolding regionally, including the ecological tipping points facing the Amazon rainforest which present risks to the global community, leading to it being coined ‘the nature COP’.

In the lead up to COP30, there are a number of events that will continue to set the stage for the global negotiations. Board directors may consider following the outcomes from climate-related events in 2025 shown in Figure 1:

Further reading: More context behind our COP29 Scorecard  

Recording: Key takeaways from COP29 for the boardroom

Watch the recording of our post-COP wrap-up webinar where an expert panel explore the key discussion points from COP29 and how to take these learnings into the boardroom.