?? Five takeaways from COP29

As COP29 closes in Baku, the global climate community has sent a clear message: The shape of the future is set, and it will be green. Despite controversies and broader geopolitical tensions, the conference brought together leaders from around the world and showed that partnerships and progress are possible, as long as we all pull in the same direction.

Here are five takeaways from COP29.

1??: The transition is happening: now, it’s only a matter of speed.

The transition of hard-to-abate sectors like steel and cement was in the spotlight at COP29. For many of these high-emitting industries, the transition to net zero is now a matter of finance and willpower. With new financial tools, and growing access to affordable renewable energy, for many industries, a transition to net zero this decade is within reach.

One of the most urgent industries to transition is the agriculture sector, which accounts for over one third of global emissions. Climate Bonds’ new criteria for agriculture investments is one such tool. Agriculture production, albeit challenging, offers huge potential for strategic climate investments. The updated Agriculture Production (Crop and Livestock) Criteria is a forward-thinking tool designed to drive real change in agriculture, reflecting cutting-edge science and practical market needs. Despite its complexity, agriculture remains a key sector for climate. With clear guidance and ambitious standards, investors can support the agriculture industry’s transition to net zero and ensure continued prosperity and security in the decades to come.

2??: Development Banks can connect capital with impact

The role of climate finance was a cross-cutting theme throughout the conference. This year saw a greater focus on matching up demand for climate investments with projects on the ground, with lots of discussion of the role of development banks and insurers in enabling the flow of climate finance to these sorts of projects.?

At COP29, Climate Bonds released our new report, “The Role of DFIs in Accelerating the Mobilisation of Green Capital.” The climate transition requires large-scale mobilisation of private capital to transition energy systems, build resilient infrastructure, and develop sustainable communities. By most estimates, global climate finance needs to increase from USD1.3tn to around USD4-7tn by 2030 in order to maintain a 1.5°C pathway. This new report includes 30 recommendations for DFIs, shareholders, and the EU Commission to rapidly scale private capital mobilisation for green investment. The full report is available here.?

3??: Ambitious NDCs present a huge opportunity for prosperity

Brazil and the UK set a positive tone with their week one NDC announcements, which represent the level of ambition that is needed to bring each country into a net-zero future. These announcements show these countries are embracing the green transition as the huge opportunity that it is. We hope to see many more upgraded climate targets and transition strategies announced by governments in the coming year.?

4?? : A welcomed focus on resilience

COP29 was dubbed the ‘Finance COP’, which perhaps glosses over the relevant events and discussions concerning finance at previous editions of COP. Baku, however, demonstrated a renewed surge in prioritising how to finance climate resilience in particular. With this backdrop, there will likely be a fresh perspective in Brazil next year around gaps in the private finance market to enable investment into relevant projects. As we look to close the resilience finance gap, you can find out more about Climate Bonds’ Resilience Programme and the newly launched Resilience Taxonomy, a major expansion of the Climate Bonds Taxonomy, that provides a comprehensive classification system and draft eligibility criteria for climate adaptation and resilience investments, here.

5??: The financial sector can facilitate the global transition

COP29 saw many discussions of creative solutions to finance the immense challenges our planet is facing. From the role of insurance as an enabler of finance for transition and resilience, to bringing in smaller development banks and national development banks as emerging key players in enabling transition, the financial sector can facilitate the global transition and build a resilient and prosperous future. This transition isn’t just a requirement - it’s a tremendous opportunity.?