COP29 has come and gone, leaving behind its usual mix of drama, controversy, and frustration. Small island states staged walkouts, only to re-enter negotiations. Oil-rich nations, including the petrostate hosts, resisted meaningful commitments to decarbonization. Collapse loomed large, but a deal was ultimately struck at what’s being dubbed the “Finance COP.” Developed countries pledged $300 billion annually in climate finance—significant on paper, but glaringly inadequate for achieving the urgent 1.5°C warming target.
As we sift through the outcomes of this summit, it’s worth asking: were the compromises worth it? And, crucially, what lessons does this hold for businesses navigating the changing climate landscape?
01 Deal or no deal: Is a mediocre agreement better than none?
The deal secured at COP29 commits developed countries to mobilizing $300 billion annually for developing nations by 2035, with a long-term target to scale global climate finance to $1.3 trillion annually. This is an ambitious leap, tripling current levels, but it fails to meet the scale or urgency of the crisis. Critics argue it offers little clarity on who pays what and skews heavily towards traditional “developed” nations while letting China and other petrostates off the hook.
So, is this underwhelming deal worth celebrating? While the shortcomings are glaring, it arguably beats no deal at all. It keeps the diplomatic process alive, sends signals to markets, and lays groundwork for further progress. In an era of geopolitical upheaval and polarizing elections, the fact that consensus was reached at all is significant.
The "Baku to Belém Roadmap" promises to revisit and enhance these targets next year. China, in particular, stands poised to capitalize, potentially stepping into the vacuum left by U.S. retrenchment to assert its global leadership.
What does this mean for business?
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Urgency in climate finance: The $1.3 trillion target signals growing opportunities and responsibilities for businesses to innovate in climate finance, from green bonds to carbon pricing.
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Leadership potential: Businesses can seize the moment by fostering innovative financing partnerships, aligning investments with global climate goals and scaling up funding needed to progress faster.
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Adaptation is key: A lack of adaptation funding has allowed supply chain vulnerability and risk to thrive, demanding businesses take proactive measures. Companies must integrate climate resilience into their operations, and build this into transition plans, especially in regions most at risk.
02 More ambitious and transparent Climate Action Plans
The Paris Agreement’s framework of Nationally Determined Contributions (NDCs) requires signatories to regularly update their climate commitments. Yet, pre-COP29 assessments revealed a stark gap: current NDCs fall far short of limiting warming to 1.5°C.
COP29 saw countries like the UK, UAE, and Brazil raise their ambitions significantly, setting bold new emissions targets. Eleven nations also submitted their inaugural Biennial Transparency Reports (BTRs), enhancing accountability under the Paris Agreement. However, lofty pledges mean little without rapid deployment of policies and infrastructure to meet them.
What does this mean for business?
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Collaboration is crucial: Businesses must work with governments to realize these enhanced targets through innovation and resource sharing.
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Stricter regulations ahead: With heightened NDC ambitions, expect tougher climate regulations and greater scrutiny on corporate emissions reporting.
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Transition plans are essential: Carbon pricing, renewable mandates, and energy standards will likely evolve. Companies need robust systems for tracking and adapting to these shifts.
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Growing opportunities: As NDCs ramp up, so will investments in renewable energy, low-carbon solutions, and adaptation technologies. Businesses must position themselves to lead in these areas.
03 A win for international carbon markets
After years of negotiation, COP29 finalized guidance on Article 6 of the Paris Agreement, which provides the framework for countries to collaborate on reducing emissions through market-based mechanisms like carbon trading. This paves the way for the operationalization of global carbon markets, allowing nations and corporations to trade carbon credits, enabling cost-effective emissions reductions and directing investment into developing nations.
While promising, carbon markets carry baggage. A history of opaque practices and questions about the social and environmental integrity of credits still casts a shadow. Critics also caution that reliance on offsets may dilute efforts to achieve direct emissions reductions.
What does this mean for business?
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Credibility matters: Clearer rules under Article 6 should enhance trust in carbon markets, creating new opportunities for businesses to offset emissions responsibly.
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Avoid overreliance: Offsets can’t replace direct action. Businesses must focus on reducing their emissions at source while ensuring any credits purchased meet rigorous standards.
04 Is the COP process fit for purpose?
Criticism of COP29’s process abounded: from fossil fuel lobbyists dominating the summit to human rights abuses overshadowing proceedings. Some experts now question whether the COP model—prone to trade-show theatrics and slow negotiation—is suited to the urgency of the climate crisis. Calls for reform include stricter rules on fossil fuel interests, greater inclusion of vulnerable communities, and a shift from negotiation to swift implementation.
Yet, despite its flaws, COP29 delivered a deal where other recent summits—such as the UN Biodiversity Conference (COP16) and the UN Plastics Treaty negotiations—stumbled. Governments, businesses, financiers, and activists came together to advance the conversation, identify opportunities, and forge stronger networks and collaborations. In a divided world, the multilateralism embodied by COP remains indispensable. The real challenge now lies in reforming the process to prioritize equity, accountability, and tangible action over rhetoric and delay.
What does this mean for business?
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Climate leadership: Businesses attending future COPs must lead by example, showcasing actionable plans rather than rhetoric.
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Advocacy for reform: Companies have a voice in shaping COP’s future—whether through lobbying for more ambitious climate policies or signing collective calls to phase out fossil fuels.
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Walk the talk: Youth voices and marginalized communities were nominally included at COP29. Businesses should ensure such representation extends to their own operations and governance.
Final thoughts
COP29 was far from perfect, but it wasn’t a failure. The agreements reached offer a foundation—albeit an imperfect one—for accelerating climate action. For businesses, the signals are clear: the time to wait for government leadership has passed. Future COPs demand more than attendance; they require active, decisive leadership from the private sector, with a focus on delivering tangible progress. Companies that do so by embracing innovation, fostering strategic collaboration, and committing to transparency will do more than adapt—they will shape the future.