Article

Key Takeaways from COP29

The conference fell short of expectations—for some, considerably so—but there were several notable outcomes.

By Torsten Lichtenau, Cate Hight, Jenny Davis-Peccoud, Xavier Houot, and Grant Dougans

min read

}

COP29 has just concluded in Baku, Azerbaijan. The conference fell short of expectations—for some, considerably so—but there were several notable outcomes. Developed nations pledged at least $300 billion annually by 2035 to support developing countries most affected by climate change. That’s up from the $100 billion pledged by 2020 and also includes a call to private and public funders to support scaling this investment to $1.3 trillion annually. Progress was also made on formalizing carbon markets, scaling renewable energy investments, and strengthening policies to address methane emissions.

Download the PDF

Given that 2024 marks both the hottest year and hottest decade on record, the urgency to tackle climate change continues to intensify. We believe there are still clear implications for corporate leaders who, in our view, have a lot to gain by playing an active role in helping to shape the transition of their industry—regardless of COP outcomes:

1. Focus on—and harness—economic value

Economics should be at the core of your transition strategy and your decarbonization pathway. Leverage innovation to uncover profitable opportunities through lower-carbon and decarbonized products, supported by a low-carbon supply chain that enhances both resilience and cost efficiency. Keep a keen eye on shifting profit pools and establish signposts to proactively anticipate industry tipping points. Cost and carbon should be addressed in tandem, based on a robust understanding of decarbonization expense, flexible pathways, and proven carbon delivery capabilities. Analyze the deaveraged demand for low-carbon offerings, and target customer segments that strategically seek decarbonization. Participation in the recently created Business Breakthrough Barometer can help companies gain insights from leaders regarding net-zero strategies, investment opportunities, and more.

2. Catalyze collaboration and shape policy

Forge stronger partnerships and coalitions across the value chain, working with customers, suppliers, and industry peers to address transition hurdles, share insights, pool resources, co-develop ecosystem solutions, and drive collective outcomes. Look for opportunities to shape local and industry regulations, subsidies, and taxes, especially amidst increasing deglobalization pressures.

3. De-risk your operating and business model

Develop a clear understanding of climate physical and transition risks and how they might affect your company’s portfolio strategy and end-to-end operations. Establish signposts to monitor and adapt to the evolving pace of climate transition risks. By adapting your operations, supply chain, and portfolio, you will be able to operate when times get tougher, future-proof your value proposition, and steadily gain market share as a front-runner and forward-thinker.

Despite progress at COP29, global climate efforts demand unprecedented acceleration. Current policies and actions project a 2.7°C temperature increase—unchanged from the past three COPs—prompting urgent calls for reform and a “shift from negotiation to implementation.” As we look ahead to COP30 in Brazil, we hope to see unified global action to strengthen Nationally Determined Contributions (NDCs), provide clarity on how best to mobilize climate finance, and secure firmer commitments to transition away from fossil fuels. We remain optimistic that corporate leaders can and will continue to take meaningful and pragmatic actions to advance sustainability, and that through collective effort we can achieve significant progress toward a sustainable and equitable future.

Download the PDF