COP29 – Key takeaways for the boardroom

What were key takeaways from COP29?

1. Limited progress was made on global financing goals, even as G20 as leaders urge for scaling up climate finance from billions to trillions. G20 leaders met last week in Rio and sent a signal to negotiating teams at Baku on the need to rapidly and substantially “scale up climate finance from billions to trillions.” Global leaders were under intensifying pressure to establish a new global finance framework, also referred to as the New Collective Quantified Goal (NCQG). This goal is intended to be more ambitious in outlining the relative contributions from different states, timeframes, and in-scope activities for financing. Despite these calls to action, the climate conference ended with a bare minimum agreement on a new public finance goal of $300 billion USD by 2035. This new goal will start in 2026 and replace the existing annual target of $100 billion, which was met two years late, and was already seen as insufficient. UN Climate Chief Simon Steill had described a more ambitious climate financing goal as “an insurance policy for humanity.”

Why this matters. Experts have suggested that $300 billion USD by 2025 will be a gross shortage to support global adaptation and resilience efforts, which will cause harm, damage, and loss to hundreds of millions globally. Businesses operating with a global portfolio must be aware of the intensifying climate threat that vulnerable countries will have to face.

2. Future of U.S. Leadership was called into question and remains uncertain. With COP29 taking place immediately after the election of President-Elect Donald Trump, who has expressed plans to withdraw the U.S. from the Paris Agreement, many questions remain about the future role the U.S. will play both at COP and leading the energy transition globally. Darren Woods, the Chief Executive of Exxon Mobil, has warned President-Elect Trump against withdrawing from the Paris agreement to curb climate-warming emissions and has said the risk of leaving an empty seat at the negotiation table is too great for the U.S. Darren Woods is joined by others, including Pedro Pizarro of one of the largest U.S. power utilities, and a host of major businesses and investors who urged Trump to remain in the agreement during his first administration and some signed on the “We Are Still In” pledge. 

Why this matters: If the U.S. is not leading the pack on the energy transition, many will look to (or continue to look to) China to play a critical role in setting the pace, standards, and economics of the energy transition. This will have negative impacts for U.S. businesses in energy, industrials, transportation, supply chain, and other downstream sectors. Businesses reliant on U.S. incentives for renewable energy, infrastructure development, or energy efficiency should assess their potential exposure to claw backs from the Inflation Reduction Act (IRA) and Bipartisan Infrastructure bill disbursements.

3. Climate change is an increasingly material risk. Climate change is not just an environmental or ethical concern, it’s financial. Businesses look to invest in climate-related efforts not only because it’s the right thing to do, but because they’re good for business and long-term viability. Since climate change is already recognized as a material risk to the financial system, central banks and regulatory bodies are issuing guidelines and formulating regulations to nudge commercial banks to integrate climate change risks into lending and risk management practices. In 2023, the U.S. faced a record 28 weather and climate disasters, each resulting in losses over $1 billion. With 22 such events in 2020 and only 5.7% per yearthroughout the 1990s, 2023 had the highest number of billion-dollar disasters in US history, highlighting a frightening reality for businesses: the climate crisis is no longer a distant concern, it’s an immediate business risk that could affect everything from financial health to operational resilience.

Why this matters: In conformance with global regulation and pressure from investors, corporations will have to disclose their climate-related financial risks in accordance with the TCFD framework (now incorporated into IFRS ISSB reporting). Corporate directors have a responsibility to ensure climate risks, both physical and transition, have been identified, evaluated, and measures have been put in place to mitigate.

4. Businesses call on leaders to choose a path towards a livable Even with hesitation of top policymakers on the global climate agenda, more than 260 businesses have signed a letter as part of the We Mean Business Coalition’s Fossil to Clean campaign. This campaign has been driven by corporates and underscores their need for clear and robust policies to accelerate the shift from fossil fuels. Referencing the UAE Consensus from COP28, the letter calls for governments to triple renewable energy capacity and double energy efficiency rates by 2030, and urges policy certainty to enable businesses to invest confidently in clean energy alternatives.

Why this matters: More and more eyes are on the corporate sector to advance the goals set in the Paris Agreement in 2015. For companies who have not evaluated their participation in such campaigns, careful due diligence will be required to determine the risk and opportunities of doing so.

5. Leaders are already looking to COP30 with questions emerging on corporate commitments to climate goals. With all the criticism of COP29’s location, many skipped Baku with an intent to focus on COP30 in Belém, Brazil. Even as its oil production booms, Brazil has been trying to position itself as a global climate leader, and COP30 offers a welcome opportunity to set the agenda. Before COP30 in November 2025, the next round of NDCs (Nationally Determined Contributions) are due by mid-February for COP30. The Brazilian President Lula da Silva spoke adamantly during the recent G20 that COP30 will be “our last chance to avoid an irreversible rupture in the climate system.”

Why this matters: Eyes will increasingly look to corporates for clarity in their decarbonization goals, strategies, and how they incent the energy transition from fossil fuels to renewable energy. Corporate directors should continue to push for their management teams to hold firm on existing goals as to not expose themselves to climate litigation risks.

Actions boards can take:

• Call for comprehensive climate risk assessment to understand the portfolio of upside and downside risks to the business with the worsening climate crisis. This assessment should consider both physical and transition risks and be in alignment with global frameworks
• Request a competitive assessment of COP engagement, climate finance approaches
• Review exposure to potential claw backs to the IRA and Infrastructure Bill disbursements and how it may impact your supply chain, direct business operations, and decarbonization plans
• Understand corporate ESG and emissions reductions goals, continue to push for consistency in implementation and mitigation of potential roadblocks

Questions for the boardroom:

• To what extent is our operational portfolio or supply chain impacted by the IRA and Infrastructure bill disbursements? Are we at risk of potential claw backs?
• How are we engaged with the COP meetings? How are our competitors and partners engaging? Should we be more or less involved in COP30 than we have been in previous years?
• What material climate risks are we most vulnerable to? How is progress on our climate risk assessment, both for physical and transition risks?
• How are our competitors considering investment-related opportunities in the global energy transition and climate finance? What can we learn from them about the potential opportunities and risks?
• Where do we have most global exposure in our business operations in regards to climate risks and threats?
• Are our emissions reduction goals sufficiently aggressive? To what extent do we face climate litigation risk for our approach to achieving our stated climate goals?