COP29 has just concluded in Baku, Azerbaijan. The annual Conference of the Parties (COP) brings together nations united under the UN Framework Convention on Climate Change (UNFCCC) since 1992, which aims to stabilise greenhouse gas concentrations and prevent dangerous human-induced climate change. Yet, for the third consecutive year, global efforts have fallen short, with projections focsrr future warming remaining unchanged[1]. As the IPCC scientists express growing doubt about the feasibility of limiting warming to 1.5°C, the focus now shifts to the 2.0°C target set by the 2015 Paris Agreement, nearly a decade ago[2].
While the previous COP28 (in Dubai) will be remembered for a record attendance and a decision to transition away from fossil fuels by 2030[3], COP29 will likely be remembered for its shortcomings. A group of experts has criticised the latest COP as "not fit for purpose" in addressing this rapidly accelerating crisis[4], while others went further and labeled the COP’s outcome as an “insult and a joke”[5] . Hosting the conference in fossil fuel-dependent Azerbaijan provoked further criticism of the event's credibility and commitment to demonstrable climate action.
Despite the increasing urgency of climate action, COP29 in Baku concluded with mixed results with participants failing to agree on some of the issues or substantively scaling down the ambition on others.
However, what is truly important to notice is that some of the main outcomes directly influence the private sector and should be taken into account by business community.
1. Climate Finance. This COP was dubbed the “finance COP”, the conference focused on increasing climate finance for developing countries. Participants agreed to provide $300bn for developing nations by 2035 and set an “ambition” to mobilise $1.3trn annually by 2035 for climate action. What is crucial is if the finance could be mobilised from a wide variety of sources, public and private, bilateral and multilateral, and alternative sources”.
2. Loss and damage found. The fund aims to help vulnerable countries adapt to climate change. It was officially finalised in Baku and now is expected to begin functioning in 2025. However, the questions on the details of the fund’s operation, including the involvement of private finance, will be resolved after COP29[6].
3. Carbon Markets. COP29 managed to finalise Article 6 of the Paris Agreement on carbon markets. The participants managed to agree on the rules on country-to-country carbon credit trading and a new international carbon market. This decision emphasises the need for businesses to engage in carbon markets and consider their inclusion in their decarbonisation strategies.
4. Nationally Determined Contributions (NDCs). COP29 was expected to establish ambitious expectations for NDCs that are about to be revealed soon after the conference. Here the UK was one of the leaders as the state revealed early an ambitious commitment to reduce greenhouse gas emissions by 81% by 2035, based on a 1990 baseline. Given this commitment, businesses operating in the UK might expect stricter regulations, especially around climate transition plans.
5. Global Stocktake. While COP29 aimed to finalise the outcomes of last year's Stocktake initiative, including a crucial pledge to transition away from fossil fuels, the decision has been deferred to COP30, next year in Brazil.
This year, COP29 emphasised the importance of companies’ contribution to decarbonisation. COP discussions have brought up the issue of the private sector’s role in climate change mitigation. As calls for increased private sector involvement grow louder, the focus is shifting towards defining the guidelines to incentivise private investment.[7]Business should not only prepare for increasing regulations and disclosure requirements, but also to elevate their climate commitments, invest in sustainable technologies, making sure they contribute to the green transition.
With the COP29 and effects of climate change dominating news cycles, businesses should keep up to speed with the major developments in the coming weeks and months, while making sure they progress their decarbonisation journey. These are some key recommendations:
· Assess Your environmental footprint: understand your current environmental impact.
· Comply with applicable regulations: ensure adherence to relevant regulations, including the Corporate Sustainability Reporting Directive (CSRD).
· Set ambitious goals: establish measurable climate goals aligned with regulatory frameworks.
· Develop a comprehensive plan: use existing guidance, such as the Transition Plan Taskforce guidelines, to create a cohesive plan.
· Innovate and invest: invest in climate technologies and build resilience in operations and supply chains.
· Monitor and adapt: continuously monitor progress and adjust strategies, as needed.
· Engage stakeholders: secure internal buy-in and involve key stakeholders.
COP29 has highlighted the increasing urgency of climate action and the importance of the private sector in achieving global climate goals. Businesses must adapt to evolving regulatory landscapes, invest in sustainable technologies, and integrate climate considerations into their core strategies. By doing so, they can contribute to a low-carbon future while mitigating risks and seizing emerging opportunities.
Black Sun Global is a stakeholder advisory and engagement agency that's been driving transformation and positive change for ambitious brands for more than 20 years. With deep expertise in disclosure and reporting, ESG, sustainability, and digital engagement, we reshape how organisations connect with customers, investors, employees, and the wider world.
We are trusted partners to some of the most influential global organisations, sparking innovation and sustainable performance through our strategic insights, partnerships, and proprietary technologies.
As founders of the Positive Change Group, we are on a mission to create a new kind of stakeholder relations partner. Our world-class specialists work closely with executive leadership teams to protect reputations, inspire trust, and promote responsible business practices - building resilience and long-term value in a rapidly changing world.
For more information, please visit: www.blacksun-global.com
Explore our thinking and learn from global thought leaders through
our blogs, podcasts, webinars, and events.