What to look out for at COP29

Representatives from around the world are meeting in Baku for COP29, aka the 29th Conference of the Parties to the UN Framework Convention on Climate Change. Below we’ve set out a few things to look out for.

1. The ‘Finance COP’

The Baku negotiations and announcements will be focused on investment for the transition. Finance teams will want to look out for initiatives that help unlock private capital for developing nations – eg Green Guarantee Group or announcements on/from multilateral banks. Announcements are expected to include a new ‘Collective Quantified Goal on Climate Finance’, this will mean agreeing a new commitment to provide annual climate finance to developing countries, replacing a previous goal of $100 billion per annum set in 2009 and met in 2023.

2. Carbon markets

There are expectations on building ‘a robust and well-regulated international carbon market’ – referred to as ‘Article 6’. More specifically this relates to Article 6.4 of the Paris Agreement which sets a framework for a centralized international carbon market. The effectiveness of the market has been a debated, but many think this could be a key mechanism to enable action –  either way it is likely to be an important outcome from the conference.

3. Build up to COP30 and the change to national targets

The nationally determined contributions (NDCs) will be revised in next year’s COP in Brazil. These are commitments that countries make to reduce their greenhouse gas emissions as part of climate change mitigation agreements. This makes the negotiations at Baku the last major step to set clear expectations for what the next NDCs should aspire to. According to the UN’s Emissions Gap Report 2024 – which looks at current emissions compared with the goals of the Paris Agreement – “to get on a least-cost pathway for 1.5°C, emissions must fall 42 per cent by 2030, compared to 2019 levels. For 2°C, emissions must fall 28 per cent by 2030.”¹ Annually the UN states this means “we need to shave 7.5 per cent off emissions every year until 2035, a figure that will grow with each year of inaction.”² This seems high but the European Commission recently reported “EU greenhouse gas emissions fell by over 8% in 2023, driven by impressive growth in renewable energy.”³

Companies may need to explore how their transition plans align (or don’t) with country plans. The importance of two-way dialogue between corporates and policy makers is more important than ever.

4. How can we accelerate the transition?

Not everyone is going to COP, but we all have roles to play. This is especially true of the financial system, which needs to change to meet the moment. This year A4S and Aviva Investors co-authored the Accelerating the Transition report. This sets out practical actions for different parts of the financial system to help deploy the private capital needed for the transition, with the urgency that is necessary. We set out action for actors from across the system with overall action areas to collaborate towards. These include:

1. Drive ambition and set robust interim 2030 targets.
2. Close the implementation gap through economy wide, systematic use of transition plans.
3. Remove friction across the international financial system, through enabling regulatory and legal frameworks to incentivize and de-risk climate financial flows.
4. Back the ‘big bets’ with industry-wide collaboration on systems-level sustainability solutions.

How will the negotiations at COP move the needle on these areas?

For further information on actions you can take we have net zero guidance and case studies, as well as a dedicated Transition Plan hub. These are all accessible via our net zero webpage.

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