Normative at COP29: making the Paris Agreement a reality

As we wrap up our attendance at the 29th UN Conference of the Parties (COP29), which we joined once more as part of the Swedish Business delegation, I’m filled with a mix of hope and concern about our current trajectory. While the discussions we had with enterprise leaders in Baku were vibrant with a “we-can-do-this” attitude, the outcomes of the official negotiations show that more action is needed from heads of state. As we enter into 2025, with five years left to halve global emissions, this COP confirmed what I’ve long felt: businesses will make or break the Paris Agreement.

Negotiation outcomes: a mixed picture

COP29 saw significant moments, yet the negotiations did not deliver the strong commitments necessary to tackle the existential threat of climate change to our collective human and economic wellbeing. Let’s break down the primary outcomes:

1. Financing Goal: the launch of the “New Collective Quantified Goal” (NCQG) on climate finance aims to secure $300 billion annually by 2035, with developed countries in a leadership role. While a worthy endeavor, the target falls a long way short of the trillions required to meet real climate challenges. Moreover, the goal allows voluntary contributions from developing nations like China, diluting the responsibility of developed countries and alarming activists and vulnerable nations alike.
2. Phasing Out of Fossil Fuels: the discussions on transitioning away from fossil fuels became a central topic. Unfortunately, the proposed draft from the UAE dialogue failed to gain consensus, resulting in a postponement to COP30. Delegates criticized this draft as “watered down,” posing a threat to the momentum we had built toward renewable energy and deforestation reduction. Additionally, the delay affects the guidance on Nationally Determined Contributions (NDCs), which is now unlikely to be ready prior to the NDC renewal deadline in February 2025.
3. Article 6 Negotiations: after nearly a decade of negotiations, COP29 completed rules for international carbon trading under Article 6 of the Paris Agreement. While celebrated by some, serious concerns linger about the potential for this mechanism to facilitate greenwashing rather than meaningful emission reductions. The proposed methodologies are still pending approval, with initial guidelines expected only in 2025.

Insights from inside the arena: a lack of data and decisive action

Besides the official negotiations between the heads of states, COP has seen an increasing influx of NGOs, academics, and private sector actors over the past few years. These key stakeholders of the global environmental crisis come together to share insights, challenges, and discuss solutions. Through our conversations at the Baku Stadium where the conference was held this year, three key themes emerged:

1. Encouraging collaborations: large corporates have recognized not only the necessity to work together but the business potential that comes with collaborative efforts. This is particularly true for sharing climate-relevant data across the value chain and exchanging best practices and decarbonization strategies with peers of one’s industry.
2. Data as the bottleneck: despite the enthusiasm felt in many conversations, business leaders increasingly voice their frustration over the limited availability of reliable carbon data across their value chains. They call for improved quality standards and transparency to enhance supply chain visibility that allows them to accelerate real reductions.
3. Talking the talk: disappointingly, many commitments from previous COPs have so far not been translated into actions. In our 2023 study, we find that while existing net-zero pledges from 967 enterprises account for a staggering 78% of global industry emissions, companies still struggle to show results. Global emissions are projected to reach record highs in 2024.

The path forward: businesses as climate leaders

Nine years after the Paris Agreement, this COP has shown us a clear way forward – though in an unexpected and probably unintended way: it is up to businesses to decide the future of the Paris Agreement.

1. Keeping 1.5 alive: large enterprises hold the power to drive substantial progress toward net zero, not just for themselves but across their entire supply chain. It is imperative that they take their net-zero commitments seriously if we want to stand a chance to uphold the 1.5 target.
2. Holding policymakers accountable: while businesses step forward, they must not let policymakers off the hook. There’s a growing call for a level playing field in net-zero regulations. Establishing improved processes for private sector participation in policymaking is crucial, as championed by initiatives like the newly founded Net-Zero Policy Network.

The climate crisis poses unprecedented challenges, but it also offers opportunities for a new kind of global leadership. It is time for businesses to fully embrace their role, to lead with action rather than words, and to make meaningful strides toward achieving the goals outlined in the Paris Agreement. The road ahead demands collaboration, transparency, and unequivocal commitment—a challenge we cannot afford to shy away from. Let’s rise to meet it.