BACKGROUND 

The 29th United Nations Climate Change Conference (“COP29”), held in Baku, Azerbaijan, from 11 to 22 November 2024, culminated in several significant outcomes. A pivotal agreement, known as the New Collective Quantified Goal on Climate Finance (“NCQG”), was reached to triple annual climate finance for developing countries to US$300 billion by 2035. Additionally, parties finalised operational guidelines for carbon markets under Article 6 of the Paris Agreement.  

Key Outcomes 

New Collective Quantified Goal on Climate Finance (“NCQG”) and Related Controversies 

Parties reached an agreement on NCQG, set a goal for developed countries to provide at least USD 300 billion per year by 2035 for developing countries to build clean-energy system, and called on the scale up of financing to developing countries for climate action from both public and private sources to at least USD 1.3 trillion per year by 2035. The goal was tripled three times from the previous target of USD 100 billion. Although the progress on the increasing financing target is a success, there remain many unsolved deadlocks over the details of the financing project.  

Agreement on Article 6 and Operationalization of Carbon Markets 

After almost a decade of discussions, an agreement was reached at COP29 on the rules and methodologies for a global carbon market and trading system under Article 6. This framework enables countries to issue and validate credible emission reduction credits, which can either be used to offset their own emissions or traded with other nations.  

Nationally Determined Contributions (NDCs) 

Nationally Determined Contributions (NDCs) form a key component of the Paris Agreement, established during COP21 in 2015. At COP29, a few nations, including Brazil, the UAE, and the UK, introduced updated NDCs ahead of the February deadline, with the UK setting a particularly ambitious target. Limited countries updating NDCs combined with a less ambitious NCQG than anticipated threatened the ability of developing and climate-vulnerable countries to implement strong NDCs, jeopardising the goal to limit global warming to 1.5°C. 

WHAT’S NEXT?  

Boards and Managements, especially asset managers and public-listed companies in Singapore, can step up their climate initiatives by:   

1. studying the latest COP29 developments on Climate Reporting and Carbon Market Participation and mapping it to their reporting as well as decarbonisation strategies. 

And more… 

HOW CAN WE HELP? 

Contact Capital Governance today to discuss how we can provide sustainability reporting and disclosure solutions for you. Find out more here.