FGS Global was on the ground in Azerbaijan for COP29, providing trusted counsel and support for leading companies, coalitions, and philanthropic organizations. Here’s what we learned in Baku and what to look out for as Brazil picks up the mantle for COP30 in 2025.
"COP29 in Baku has ended with a disappointing deal. But it is a deal the world can build on in 2025."
Mary Robinson, First woman President of Ireland and former UN High Commissioner for Human Rights; former Chair of The Elders.
The 2024 UN Climate Change Conference (COP29), held in Baku, Azerbaijan, concluded over the weekend after marathon negotiations between governments yielded an agreement on climate finance and carbon markets and set the stage for next year’s highly anticipated COP30 in Belém, Brazil.
The dominant theme of COP29 was finance and how much wealthy countries should pay to developing nations most at risk of climate change. In the end, the parties to the COP (197 countries plus the European Union) agreed on a framework where advanced economies will deliver $300bn a year (three times the previous $100bn target agreed 15 years ago) in climate funding and work to raise $1.3tn a year from “all public and private sources” by 2035. The final number proved to be bitterly disappointing to Global South countries.
But, beyond the headlines of the fractious negotiations, here are the five things we learned:
The diplomatic climate game continues to change. COP29 opened up with questions about the whether ambitious international collaboration would be possible under the incoming Trump Administration and the expected withdrawal of the United States from the Paris Agreement. The acrimonious debate in Baku then further highlighted concerns about whether the UN process, which requires consensus between all nations, can deliver lasting results. COPs will continue to be a critical part of the process, but the onus will be increasingly on ambitious coalitions of companies and countries to move things forward. We are already seeing Brazil and the UK step up and look to build smaller groups to deliver action at scale. Many are watching for what China’s path forward will be, given the likely U.S. vacuum.
The battle for finance isn't over. There will be a continued contest over how the new USD $300 billion commitment will be delivered, and the roadmap to $1.3 trillion with the UN expected to publish more details at COP30. There is little doubt that private sector investment will be needed to close the gap. The devil will be in the details, and we expect a big focus on smart policies to mobilize finance; for example, regulatory changes or financial instruments that avoid drawing from the global pot. Strong expectations that blended finance can emerge as an asset class remain. The role of carbon markets is also a big question mark; the agreements in Baku allow for the basic infrastructure to be created, but big questions around integrity standards and the alignment of between Article 6 and the Voluntary Carbon Market are yet to be decided. This will be a theme to watch in 2025.
Nature is in the spotlight. Brazil has given a clear signal that it wants to establish mechanisms at COP30 to protect forests. Debt for nature is on the agenda of the G20. As the focus shifts from Baku to Brazil, there are high hopes for a breakthrough on the resilience and sustainability of the world’s nature systems, and particularly the role of food and agriculture. Leading businesses have been engaging with Brazil for many months now, and this will only pick up in intensity now COP29 has ended.
Expectations for NDCs are muted. As governments return home from Baku, the anticipation for the updated NDCs reflects the new climate reality. The world has shifted dramatically in the last 2 weeks. There are questions over what Trump’s presidency means for domestic and global climate policy. China’s presence at COP was relatively muted, although their financing to the Global South shouldn’t be underestimated. NDCs need to be grounded in pragmatism, with clear policy signals that allows the private sector to make smart investment decisions. The appetite for ambitious, but unachievable aspirations seem to be waning.
We need to update the climate narrative. The final outcomes from Baku show that we need a recalibration around how to align past pledges and the action needed to get the world on a credible pathway to limit global warming. There is not enough public finance to close the vast investment gap, and governments need to ground any action in economic and security benefits to ensure buy-in from their electorates. Businesses need to balance their often-disparate stakeholder expectations to reflect this new reality. To keep moving forward, we need solutions that don't require unilateral global agreements or dependency on public finance. There is no doubt 2025 will bring new coalitions as both government and business look to secure an advantage.
For better or worse, COP29 was destined to be an unwitting bridge between COP28 in Dubai and COP30 in Belem, which is why many world leaders and CEOs skipped it altogether. Brazil in 2025 will be a different story.
For business, the COP process needs to be reframed. This isn't just another conference; it's a strategic opportunity for corporations and organizations to engage directly with stakeholders and take on sustainability at its source; to influence policy, technology, and finance discussions crucial for sustainable development, right in the heart of one of the world's most critical carbon sinks.
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Building upon decades of advising clients on their environmental, social, and corporate governance strategies around the world, FGS Global helps clients maximize their presence at the annual COP and stand out in a crowded field. Reach out to us now to learn how we can help you make the most of your presence at COP30 in Brazil.
