COP integrates voices beyond governments and actively involves the private sector, NGOs, and communities impacted by climate change to ensure inclusive participation and foster international cooperation to reach the bottom line 1.5°C goal. 

COP meetings typically include three agendas:    

• Presidential Action Agenda: This includes initiatives led by the COP Presidency, focusing on critical areas such as climate policies, funding, technology, and strategies to combat climate change.
• UNFCCC Negotiations Agenda: This process enables Parties to review progress, discuss proposals to advance commitments, and align on decisions through bloc-based negotiations. Historically, these have led to major accords like the Kyoto Protocol, the Paris Agreement, and the UAE Consensus.
• Third-Party Agenda: This agenda brings together diverse stakeholders, including the private sector, NGOs, community leaders, and civil society, to discuss and align on initiatives to address climate change.

Through these multifaceted agendas, COP strives to create a comprehensive approach to addressing the climate crisis, fostering a united global response.   

What happened during the last three years of COP?

COP is where climate ambitions confront reality; the urgency of achieving the 1.5°C target presents the challenge of ensuring that the steps taken toward this goal are equitable, just, and actionable. Over the past three years, COP meetings have illustrated both progress and opportunities for meaningful action.

COP26 (Glasgow) - Accelerated commitments

COP26 marked a significant step forward in global commitments to climate goals, making progress on multiple fronts. Key outcomes included a carbon-trading agreement, the Global Methane Pledge, the Global Coal to Clean Power Transition Statement aimed at accelerating the phase-out of coal. Additionally, COP26 saw the launch of the Glasgow Financial Alliance for Net Zero (GFANZ), with 400 plus financial institutions committed to advancing the Paris Agreement objectives through financial tools and resources. COP26 started conversations to limit global warming to 1.5^oC, but no agreements were made on the pace of action, responsibility, and cost-sharing.

COP27 (Sharm El Sheikh) - Continued traction and an agreement on loss and damage

Traction continued at COP27 with more members joining the GFANZ, the Global Methane Pledge, and the efforts to phase out coal. COP27 also created more confidence in carbon markets, with the launch of the Energy Transition Accelerator and the Global Carbon Trust. It also resulted in an agreement  to provide Loss and Damage funding, new pledges to the Adaptation Fund, and an increased focus on funding clean technologies and innovation. While COP27 made progress towards limiting global warming, it also fell short of securing substantial commitments.

COP28 (Dubai) - Renewed momentum with a strong shift to action

Momentum surged at COP28, marking a stronger shift toward action. On the very first day, the Loss and Damage Fund was operationalized. COP28 delivered the UAE Consensus, rallying Parties around a comprehensive framework aimed at reducing emissions, scaling up renewable energy, and increasing financing. COP28 also saw the conclusion of the first ever Global Stocktake, which revealed that current global efforts are projected to result in a temperature increase of between 2.1°C and 2.8°C. This prompted a call for countries to submit updated Nationally Determined Contributions (NDCs).  A new approach to fossil fuels was established, and commitments were put in place to triple renewable energy capacity and double energy efficiency rates by 2030.

While COP28 secured over $80 billion in climate finance commitments, the gap to meet trillions of US dollars in climate financing remains. Fundamental questions regarding financing levels and equitable burden-sharing are still to be addressed at COP29.

In the months following COP28, the “COP Presidencies Troika” was announced, establishing a partnership among the Presidency of COP28 and the upcoming Presidencies of COP29 in Azerbaijan and COP30 in Brazil. The Troika enables interconnectedness among COP agendas, provides a platform for collaboration, and ensures continuity in the commitments made.

What to expect at COP29?

COP29 will take place in Baku, Azerbaijan from Monday November 11 to Friday November 22, 2024. COP29 is expected to be an important meeting for global climate action, and there is a pressing need for it to achieve several breakthroughs. So, on the journey towards collective achievement of the 1.5°C goal, what will COP29 hope to deliver? There are four areas to watch:

The Cop29 Presidency action agenda: COP29’s Presidency has put forward 14 initiatives to tackle different climate pillars, these are:

Climate Finance Action Fund (CFAF): This fund encourages voluntary contributions from fossil fuel producers to catalyze collaboration between public and private sectors in areas such as mitigation, adaptation, and research and development. It aims to provide highly concessional and grant-based funding to help address the impacts of natural disasters.

The Baku Initiative for Climate Finance, Investment and Trade (BICFIT): This is a platform to promote investment into green diversification, support policy development, and share expertise.

Green Energy Zones and Corridors: A pledge to establish green energy zones with targets to promote investment, economic growth, and infrastructure development.

Energy Storage and Grids: A pledge to increase global energy storage capacity and commit to investments for developing grids.

Hydrogen Action: A declaration and guiding principles to address regulatory, technological, financing and standardization barriers for hydrogen markets.

COP Truce Appeal: A call for peace and climate action, and a pledge to support the most vulnerable.

Green Digital Action: Acceleration of climate action in the ICT sector and enhancement of accessibility to green digital technologies.

The Baku Initiative on Human Development for Climate Resilience: Launched in October in Baku to drive investments and cross-sectoral interaction among education, skills, health, well-being, and establish COP-to-COP continuity.

The Baku Harmoniya Climate Initiative for Farmers: An aggregator of initiatives and networks that aims to identify synergies and address gaps in agriculture, food, and water – including the empowerment of rural communities.

Methane Reduction from Organic Waste: A declaration to streamline work and quantify methane reduction targets in both waste and food systems.

Multisectoral Actions Pathways (MAP) for Resilient and Healthy Cities: A declaration to enhance multisectoral cooperation to address climate challenges in cities and catalyze urban climate finance.

Enhanced Climate Action in Tourism: A declaration to establish sector-specific targets for tourism within Nationally Determined Contributions (NDCs) and promote sustainable practices in the sector.

Water for Climate Action: A declaration to implement an integrated approach - when it comes to tackling climate change’s impact on water basins and ecosystems.

The Baku Global Climate Transparency Platform (BTP): A platform to support developing countries in preparing and submitting the Biennial Transparency Reports: promoting collaboration and knowledge sharing.

An Advancement on prior commitments - COP29 is expected to build upon and advance COP28 outcomes. Specific areas for development include:

Advancing commitments: Expanding pledges for the Loss and Damage Fund, securing commitments to increase energy storage and grid upgrades, and scaling zero- and low-emission technologies.

Increasing transparency: Enhancing reporting and collaboration frameworks to advance accountability in meeting COP goals, while also promoting knowledge sharing.

Navigating the stance around fossil fuels: Divergent interpretations around the way forward for fossil fuels emerged after the UAE Consensus of COP28, with some proponents advocating for a full transition away from fossil fuels, while others support an emissions-based approach, arguing that fossil fuels will continue to be essential and so emphasize the need for emissions reduction. These discussions are likely to resurge during COP29, but could be overshadowed by other imminent topics, such as climate finance.

A new climate finance goal: Climate finance is expected to take center stage at COP29. The New Collective Quantified Goal (NCQG) aims to increase financing levels beyond the past pledge of $100bn annually. Following years of negotiations, the NCQG is coming to a critical moment at COP29, and success hinges on breakthroughs around:

Scope of financing: Achieving a balanced allocation of financial resources among adaptation, mitigation, and loss and damage efforts.

Level of financing: Despite the growing recognition that financing needs may reach several trillion US dollars annually, pre-COP discussions suggest that a more realistic figure could be a few times higher than today’s levels.

Burden sharing: Several divisions persist regarding the equitable distribution of the climate cost. The discourse on financing responsibility is evolving from a focus on “developed” countries to “wealthier” nations, with proposals to use indicators such as Gross National Income (GNI) and CO₂ equivalent emissions as criteria for allocation. Additionally, there is a growing call for the private sector to contribute more significantly to financing efforts.

Stronger Commitments via Nationally determined contributions: COP29 is an important juncture that will set expectations around Nationally Determined Contributions (or NDCs), especially with submissions due within few months of the meeting.

COP29 is likely to:

Raise the level of ambition: Emphasizing the need for more progressive and ambitious NDCs (through an approach coined as “NDC 3.0”) and ensuring alignment with all climate agreements.

Raise the level of ambition: The latest United Nations Framework Convention on Climate Change (UNFCC) NDC Synthesis Report, issued early November 2024, revealed that national climate plans are not yet close to achieving the 1.5^oC target and the level of ambition should be much bolder. COP29 will re-emphasize the need for more progressive and ambitious NDCs (through “NDC 3.0”, or the next round of NDCs, which are due in 2025) and ensuring alignment with all climate agreements

Increase rigor and diligence: Increased scrutiny is expected regarding the quality and level of detail in NDCs, and for Parties to formulate clear pathways for the effective implementation of their plans. Additionally, mechanisms will be put in place to monitor progress on NDCs and to raise the level of transparency.

Narrow the gap for developing countries: Emerging nations have fundamental differences in terms of how NDC ambitions are set, especially as their climate plans rely on financing commitments from developed nations, which have not yet fully materialized. 

The other COP events

In addition to addressing climate challenges at COP29, the world will also engage in discussions at the 16th Conference of the Parties to the Convention on Biological Diversity (COP16) in Colombia (from December 7 to December 19) and the Conference of the Parties to the United Nations Convention to Combat Desertification (UNCCD) in Saudi Arabia (December 2 to December 13). Each of these conferences will focus on vital facets of environmental resilience. In September this year, the “Rio Trio Initiative” was launched – a collaboration between the governments of Azerbaijan, Colombia, and Saudi Arabia. This aims to boost global sustainability efforts by aligning the work of the incoming presidencies of these three COP events. This synchronized focus across climate, land, and biodiversity highlights the urgent need for integrated global efforts to tackle interconnected challenges.

Implications for business

2024 promises to be a unique year as “three COPs” take place, capturing global attention while leaders seek to realign their efforts on climate change, desertification, and biodiversity. For businesses, this period presents crucial opportunities and challenges, leading to several important implications:

Adopt localized climate strategies: As COP cascades into both regulatory requirements, taxes, and incentives across regions, it is important for businesses to adopt localized climate strategies to navigate and adapt to the complex and global landscape of requirements. This is particularly vital for businesses operating across multiple regions.

Manage business risks: As various regulatory frameworks emerge–such as carbon markets, carbon pricing, and Scope 3 greenhouse gas (GHG) emissions reporting–-businesses must evaluate carbon footprints across products and supply chains. It is essential for them to adopt data-driven strategies to evaluate and manage their exposure to these regulations.

Access competitive financing: Businesses that commit to transparent and verifiable climate goals will discover a financial market that rewards champions of climate action. By embracing these initiatives, companies can access increasingly competitive financial instruments, such as green bonds and sustainability-linked loans, which offer competitive rates.

Reputation as a strategic asset: Climate inaction is increasingly viewed by investors, customers, and employees as a reputational liability. In an environment of heightened transparency, scrutiny, and accountability regarding climate issues, businesses must take the lead by articulating a strong narrative focused on climate and sustainability.

Tap into massive growth opportunities: As COP guides the world back on track regarding climate and environmental trajectories, immense growth opportunities arise to innovate and scale the next wave of climate technology and green businesses. By investing in research and development and embracing a circular economy, businesses can access new value pools and create new businesses, products, and services. According to the World Economic Forum, nature-positive actions are projected to unlock $10 trillion in new opportunities annually by 2030.

Oliver Wyman and COP29

Oliver Wyman’s Global Climate and Sustainability teams are actively engaging with stakeholders and industry leaders as we approach COP29. The Oliver Wyman team will be tracking commitments and developments as they emerge, synthesizing key insights and the implications of COP29 meeting outcomes.