What businesses should expect from COP30

The environmental context

2024 was the globe’s warmest year on record and the first calendar year in which the average global temperature exceeded 1.5°C above pre-industrial levels.  According to a recent report from the University of Exeter, the world has just reached ‘the first of many Earth system tipping points that will cause catastrophic harm unless humanity takes urgent action’.  The Earth’s warm-water coral reefs, on which nearly a billion people and a quarter of all marine life depend, are experiencing widespread mortality as a result of warming seas.

Tropical rainforests are important for both local and global climate and to limit the effects of climate change, but according to the World Resources Institute, the “tropics lost a record-shattering 6.7 million hectares of primary rainforest  in 2024, an area nearly the size of Panama”. As Brazil is the home of the Amazon rainforest, we expect deforestation to be high on the agenda at COP30.

Challenging geopolitical context

The COP climate negotiations are being conducted in a highly challenging geopolitical context.

The United States government has withdrawn from the Paris Agreement once again and continues to criticise global climate action, with President Trump calling climate change “the greatest con job ever perpetrated on the world”.

States and people are also continually contending with geopolitical conflicts and national security issues which are drawing attention away from the urgency of climate change. In an increasingly volatile world, defence spending has climbed up the agenda and has become a policy priority for many States. And sluggish growth together with growing economic hardship has led to a tightening of public purse strings, reducing overseas aid budgets and squeezing funds available for climate commitments.

However, countries and companies are continuing to take actions which support climate goals, for example with renewables adoption. Renewables are on course to meet almost half of global electricity demand by the end of this decade, according to the IEA.

Although businesses may not be directly affected by Climate COPs, the decisions made at COPs can create risks and opportunities, including incentives and barriers to climate investment for mitigation and adaptation.  Decisions can also quickly trickle down, potentially resulting in new regulation and enabling or incentivising green and net zero transition investment.  For example through national carbon budgets and industrial strategies – see here for the UK’s recent publication of its Carbon Budget and Growth Delivery Plan.

So let’s take a look and see what the key items on the agenda are this November.

COP 30 themes to watch out for

Key priorities for COP30 include (i) accelerating the implementation of climate agreements, (ii) reinforcing cooperation and multilateralism, (iii) addressing climate justice and inclusion (seeking to include historically excluded voices and indigenous voices), (iv) mobilising climate finance, and (v) focussing on specific, actionable goals (for example energy transition, forest protection and nature and biodiversity).

• Climate finance

  At COP29, a new target for mobilising climate finance was agreed, the New Collective Quantified Goal (“NCQG”). Under this agreement, the NCQG was U.S.$300 billion per year by 2035 with a promise to mobilise U.S.$1.3 trillion per year for Least Developed Countries and Small Island Developing States.

  The ‘Baku to Belém Roadmap’, a presidency-led initiative, is intended to address the gap between the U.S.$300 billion commitment and the U.S.$1.3 trillion ambition. The roadmap and corresponding discussions will cover issues such as scaling climate finance and the barriers to redirecting capital to climate action, including unsustainable debt levels and the conditions for accessing climate finance in developing countries.

  The initiative is intended to mobilise private sector finance so we can expect that incentives will be discussed – as without private sector engagement scaling will be impossible. For businesses this is an opportunity to engage in climate finance through blended finance and other mechanisms and to diversify portfolios of investment.

• Climate adaptation and loss and damage

  Enhancing resilience and adapting to the impacts of climate change will be a central topic at COP30. The Paris Agreement introduced the concept of a Global Goal on Adaptation (“GGA”) and governments adopted a framework at COP28 to guide the implementation of the GGA. At COP30, they will decide on the indicators that will be used to track progress made, effectively operationalising the GAA.

  Financing will inevitably also feature in these conversations. The adaptation finance gap is estimated at up to U.S.$387 billion per year for developing countries this decade. Loss and damage, an historically controversial funding mechanism which aims to provide financial assistance to communities most vulnerable to the effects of climate change, is inextricably linked to adaptation. This is sure to be on the agenda as extreme weather events continue to cost the global economy and affect the lives of its citizens.  Clearly, more adaptation should mitigate future loss and damage. And the importance of this cannot be overstated as we see the recent damage sustained by Jamaica, Haiti and other countries in the path of Hurricane Melissa.

  Adaptation is not just essential for societies but also represents an opportunity for businesses to invest in others and their own operations and supply chain to build resilience.

  The Presidency is also calling on all States to submit their National Adaptation Plans (NAPs) in time for COP30 so that they can be used as strategic roadmaps to build future resilience.

• Taking stock of Nationally Determined Contributions (NDCs)

  States were required to submit their NDCs by 10 February 2025. Approximately 100 Parties to the Paris Agreement representing two-thirds of global greenhouse gas emissions have now either submitted or unveiled new NDC targets, including China and Nigeria who have announced economy-wide emissions reduction targets covering all greenhouse gases and all sectors for the first time (see here). Updated and ambitious NDCs are essential to enable a frank discussion at COP and to understand where the world stands in its aims to keep within the Paris Agreement 1.5°C target.

  For individual States, NDCs translate into legislation, politics and opportunities.  They determine the sectoral pathways and green industrial policy of States. The last stocktake report, published in October 2024, found that full implementation of the NDCs as they then stood would reduce emissions by 5.9% by 2030, as compared to the 2019 level. In comparison, the UN’s Intergovernmental Panel on Climate Change (“IPCC”) estimated in 2022 that a 43% reduction in global emissions by 2040 is required to keep within the 1.5°C target.  The NDCs need to be ambitious if we are to meet this target.

  The COP30 Presidency will therefore be taking the opportunity to encourage Parties to raise their ambitions and connect their plans to practical implementation, especially given the recent advisory opinion from the International Court of Justice which determined that the 1.5°C target was a legally binding goal.  Ambitious NDCs are likely to be an impetus to create long-term policies and to mobilise the real economy, the financial sector and private capital to enable and de-risk decarbonisation pathways and help States meet these crucial commitments.

• The Energy Transition

  On energy transition, a series of High-Level Energy Transition Dialogues have already been held to build momentum ahead of COP30. Mr. André Corrêa do Lago, the COP30 President, stated in a letter that this COP30 “should also support the acceleration of the energy transition worldwide, including tripling global renewable energy capacity, doubling the global average annual rate of improvement in energy efficiency by 2030, and transitioning away from fossil fuels in energy systems in a fair, orderly, and equitable manner”.

  We can expect to hear much more on the energy transition at COP30.  With national leaders emphasising that accelerating the energy transition can unlock jobs, growth, and energy security.

• Nature and the role of forests

  Although biodiversity and nature have their own COPs (with the Biodiversity COP16 last being held in November 2024), climate and nature are interrelated crises and need to be considered together.

  Given the setting for COP30, forests are high on the agenda.  The Brazilian Presidency has recognised ‘Stewarding Forests, Oceans and Biodiversity’ as one of the COP30 Action Agenda themes and is launching the Tropical Forest Forever Facility (“TFFF”) at COP30, the largest-ever funding mechanism for forests. Indeed, given the physical setting of COP30, the role of natural ecosystems in regulating climate is likely to be a prominent topic.  And there are efforts to recognise the voices of excluded and indigenous peoples, for example the launching of the Circles of People (intended to amplify the voices of indigenous peoples, traditional communities, and afro-descendant groups).  Themes connected to fair and inclusive transition will be woven throughout the other topics discussed at COP30.

• Carbon markets

Much progress was made on carbon markets at COP29.  Over the last year, further progress has been made on standards to promote integrity, transparency and credibility in carbon markets.  Continuing this work and achieving international alignment and standardisation will be crucial at COP30. Nature markets play an increasingly important role in climate change mitigation and nature recovery and this is likely to be part of the conversation at COP30. Although voluntary carbon markets exist outside of the Paris Agreement mechanism, the role of these markets is becoming increasingly integrated with achieving climate goals.

Recent news reports have also suggested that a coalition of countries may adopt carbon pricing linked with border tariffs, like the Carbon Border Adjustment Mechanism adopted by the EU.  We will have to watch how events unfold to see whether this will become a reality.

Our global ESG practice brings together a multidisciplinary global team that provides clients with best-in-market support.  We are following developments relating to COP and ESG generally, so please get in touch if you would like to discuss.

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This note is intended to be a general guide to the latest ESG developments. It does not constitute legal advice.

Authored by Olivia Wisden, Emily Julier, and Bryony Widdup.