COP 29: political process failure points to clear responsibility for corporates

By Jeremy Cohen, Senior Partner and Georgie Smith, Senior Consultant

For those of us absolutely desperate to put some kind of positive spin on COP29, yes a climate financing mechanism was established for ‘loss and damage’, helping some of the world’s poorest countries deal with the impacts of climate change. In the early hours of Sunday, it was formalised at a level $300 million per year, far below the $1.3 trillion annual sum the talks had earlier agreed would be necessary. As such, ho hum.  

This latest failure of the COP to get anywhere close to what its leaders and negotiators agree is actually required is now the annual pattern. Hard work over eleven and a half months to align on the need, two weeks to water the need down to something palatable for the wealthiest nations to announce. 

More than 1,700 oil, gas, and coal lobbyists registered for COP Azerbaijan. The final text was delivered against the backdrop of the fossil fuel industry successfully advocating to keep any talk of “phase out” off any page, and last year’s breakthrough “transition away” being replaced by the hosts celebrating hydrocarbons as a “gift from God”. Cynicism aside, from a corporate perspective, it’s hard not to see the extractive companies as the big winners of this COP, and its more recent predecessors for that matter. 

And so – as happened in the aftermath of COP28, we’re left with the question, is this the best we can do in dealing with humanity’s most existential crisis? We have given up on 1.5 degrees, but decided that people don’t want to hear that, a political position supported by many climate scientists themselves. Don’t worry, 2 degrees can be the new 1.5. So, the focus can shift to climate preparedness, carbon markets and trading, and technological solutions. In other words, if we can’t fix the climate we’ll simply get ready for the storm, and pray the roof holds. Carbon capture makes for a great showreel. 

What does this mean for companies, their sustainability strategies, and climate transition plans? Honestly, not much. It means that – at least from a regulatory perspective – steady as she goes is just fine. The watch-out here is what happens when the climate excrement hits the proverbial fan. The floods in Valencia, Storm Bert, Bangladeshi monsoons, Category 5 Hurricane Beryl etc. The climate emergency IS happening. And as it impacts more communities, more countries, more insurers, in more ways, the political and economic bill is adding up. That’s a ticking bomb you can hear. 

Consumers are more alert to the gap between ‘say’ and ‘do’ on climate than they have ever been. They can spot greenwash a mile away. And as their expectations mount on what they expect their leaders to do, they can see that the United Nations and the COP mechanism is not fit for purpose. Citizens cannot really hold the UN accountable for its failings on climate. But they can act at home. And they can act with their wallets. We have a long way to go before carbon labelling and “climate boycotts”, but we are advising clients to prepare for the backlash. 

Taking advantage of a Trump administration and a flailing COP to walk-back climate ambitions might get score some “anti-woke” points with some investors, but all it really does is bank more risk. Decarbonization against a clear roadmap is the only credible corporate approach, and demonstrable impact for the good of the planet can only help your reputation and brand. A lot can happen in the world between COP 29 and COP 30, just don’t expect much of it to come from the COP process itself.

What did you miss? 

Dominating the news agenda

Representatives of the Alliance of Small Island States (AOSIS) walked out of COP29 talks in Baku, rejecting a $250 billion offer from richer nations to address climate change impacts. AOSIS criticized the proposal, stating it showed "contempt for our vulnerable people," emphasizing their nations' severe vulnerability to global warming. Azerbaijan’s lead negotiator, Yalchin Rafiyev, reassured that COP is striving for a "fair and ambitious outcome," particularly in finance, to align with the needs and priorities of developing nations.

The host of this year’s climate talks, Ilham Aliyev, used his opening address to gripe at hypocritical Western governments who buy his gas and lecture him about torching the planet, referencing ‘state-controlled NGOs and fake news media’ as perpetuators of these criticisms. Aliyev described oil and gas as “a gift of the God” the same as any other natural resource. 

John Podesta reassured COP29 delegates that “we are here to work” despite the “bitterly disappointing” outcome of the US election. German climate envoy Jennifer Morgan also faced questions about whether she would be hamstrung by the collapse of Chancellor Olaf Scholz’s government.

Government activity

Azerbaijan’s state oil and gas company (Socar) is planning to increase new production of fossil fuels at the same time as Baku pushes other countries for climate action according to a report by Global Witness. 

Keir Starmer delivered a commitment for the UK to cut greenhouse gas emissions by 81% on day 2 of the climate summit. The announcement made the UK one of the first countries to announce an official UN carbon cutting plan (NDC) ahead of the due date in Feb next year. 

Argentinian negotiators have been called home from COP29 by the President Javier Milei’s government, just three days into the two-week summit. The Argentinian President – who has previously dubbed the climate crisis a “socialist lie” – had communicated with US president-elect Donald Trump the day before according to his spokesperson.

In a stunning, historical blow for the UN's key climate event, India rejected the deal, with representative Chandni Raina stating it had been gavelled through without the country's approval. "This, in our opinion, will not address the enormity of the challenge we all face. Therefore, we oppose the adoption of this document," Raina said.

Business and company announcements

COP29 talks were overshadowed by the news that oil giant Shell won a landmark case in the Dutch courts, overturning an earlier ruling requiring it to cut emission by 45%. The case had been brought by campaign groups and 17,000 Dutch citizens. The Hague court of appeal said it could not establish that Shell had a “social standard of care” to reduce its emissions. 

Antonio Guterres has reiterated his call for companies, financial firms, cities and regions to develop credible, 1.5C-aligned transition plans ahead of COP30 next year in Brazil. 

The world’s top MDBs (multilateral development banks) pledged to ramp up climate finance to low- and middle-income countries to $120 billion a year by 2030 as part of efforts to agree an ambitious annual target. The new figure is a more than 60% increase on what the group of 10 multilateral development banks had funneled to poorer nations last year. 

Research publications

The UN’s refugee body released a report saying climate breakdown is making life even more difficult for people fleeing war and persecution. It finds that three-quarters of the 120 million displaced people around the world are in countries severely affected by climate breakdown.

New analysis finds that social media platforms are becoming “dangerously polluted” by falsehoods about the climate crisis. The actions of big oil and big tech are helping reframe extreme weather events and sow conspiracy theories about renewable energy, the report found.

This year the world is on track to put 41.2 billion tons (37.4 billion metric tons) of the main heat-trapping gas into the atmosphere. It’s a 0.8% increase from 2023, according to Global Carbon Project. 

According to analysis by the Financial Times, energy companies have found numerous ways to hide the magnitude of their emissions, with experts saying they emit far more methane than we realise.

 

Stuart Lambert