New York Climate Week was the hotly anticipated major climate event of the year – it didn’t disappoint. There was a raft of big announcements and bold new initiatives by governments, businesses and civil society alike.
Here are our top 5 takeaways.
Progress amid the talk of backlashes and backsliding
After months of histrionic headlines around companies giving up on sustainability, New York Climate Week (NYCW) saw more realism emerge about the state of climate action. Net Zero Tracker published new data showing the number of companies continuing to make climate commitments increased 25% over the year1 (SBTi data published in June suggests this could be higher still). CDP’s research shows more businesses maintaining or increasing ambition than cutting it. And in New York, the conversation focused on challenges of implementation and the way new EU regulation - on disclosure, deforestation and commodity imports - was forcing companies globally to act. The policy barriers and need for systems change were at the forefront of the conversation - with leaders differentiated by their ability to articulate the way ahead.
Climate, trade, industrial and security policy merge
The international trade system is set to become more complex as governments seek to protect nascent low-carbon industries and jobs in heavy emitting sectors in transition from high-carbon imports and Chinese competition. The EU Carbon Border Adjustment, which will introduce new carbon tariffs, has captured the attention of many US business leaders and policy makers - both for its direct impact on US companies and potential to be imitated by other markets. On the sidelines of NYCW, many suggested that the US should develop its own mechanism - not least to protect the major investments prompted by the Inflation Reduction Act. Expect the debate to intensify no matter who wins Novembers’ election.
How much does a dollar cost?
NYCW illustrates how governments, multi-lateral financial institutions and the private sector are now focusing on the different kind of finance needed to meet the world’s climate goals – and not just the total.
Developing nations have been clear that that they want more grants and debt relief to support the development of low carbon economies. Meanwhile the private sector needs to address key risks that prevent investment in these markets or low carbon technologies as they scale from first of a kind installations to commercially competitive solutions. The role of philanthropy, new blended finance instruments and carbon markets were all in the spotlight as the conversation moves from the quantity of capital required to its composition.
The contest around the New Collective Quantified Goal set to be agreed at COP29, in Baku, will only intensify the debate.
Unpacking the AI - energy dynamic
While the enormous energy demands from AI is causing alarm, the week saw a progressive change of tone as the potential for big tech companies to incentivise the development of clean energy became clear. Nuclear got a boost - as news of Microsoft’s deal with Constellation to re-open the Three-Mile Island nuclear plant and a pledge by 14 major financial institutions to support a tripling of global capacity gained attention. Nevertheless, developers of new nuclear plants face ongoing scepticism about their ability to deliver capacity on time and budget.
Building to nature’s big moment
COP29 is still months away but the countdown to COP30 has begun in earnest. Over the next 12 months a series of major events will set the stage for what many hope will be a breakthrough moment for nature. This will start in just a few weeks with COP16 in Colombia and continue in earnest next year. The preparations have already begun – with businesses and civil society organisations positioning themselves to shape the conversation over the next 12 months. Expect to see increased attention on the development of high-integrity carbon markets, financing nature-based solutions, and corporates convening around clearer definitions of how nature is accounted for within a value chain - including practices around regenerative agriculture.
As we look forward to the rest of the year, the outlook for businesses will certainly be different. COP29 in Baku is expected to be focused on the negotiations, with limited corporate presence compared to Dubai - no doubt in part due to the timing of the US election bringing continued near-term uncertainty for global business. But, regardless of the climate calendar, New York has shown that there is a plethora of business critical issues – and opportunities – for business.
