COP28: Implications for Businesses in 2024 and Beyond

I attended the UN Climate Change Conference in Dubai, along with 100,000 people from different backgrounds and sectors. We all shared a common goal: to tackle the climate crisis. I saw how business and innovation could drive positive change and create solutions for a world in need of transformation.

The conference was a historic event, with several breakthroughs for climate action. For the first time, 198 countries agreed on the need to reduce fossil fuel emissions, as part of the UAE Consensus. This was a crucial step towards reaching net zero by 2050. At the same time, 120 countries pledged to triple their renewable energy capacity by 2030. These developments matched another key theme at COP28: the growing role of climate technology. Technology was a main topic of discussion, highlighting its importance for both mitigation and adaptation. As we face the irreversible impacts of climate change, technology can help us shape a better future. Another win for nature was the recognition of the link between climate change and biodiversity loss. Multilateral banks committed to follow nature-positive finance principles, while countries increased their nature-positive actions. These moves showed progress towards a more sustainable and resilient future.

Don’t miss this chance to transform your business and make a difference. This is not just an opportunity; it’s a call to action. Adopt practices and principles that will help you achieve net zero and reduce your environmental impact. Whether your technology is a source of innovation, ready to help us cope with a changing climate, or your company needs to address the risks of biodiversity loss, the time to act is now.

Here are some of the outcomes from COP28 that could affect your organization in 2024 and beyond, and how you can respond to them:

2x efficiency, 3x renewables by 2030

Spearheaded by the United States, the European Union and the United Arab Emirates, COP28 delivered on a global pledge to expand worldwide renewable energy capacity to at least 11 terawatts and achieve a yearly energy efficiency improvement rate of four percent by 2030. The initiative aims to reshape the global energy landscape and combat climate change by reducing reliance on fossil fuels and advancing global decarbonization efforts. An annual review mechanism will track progress toward the ambitious targets.

Implications for business:

One hundred eighteen countries signed this pledge and committed to concrete action across global energy systems. Thus, policy and regulatory shifts are to be expected, particularly in relation to power grid enhancements and regulatory and permitting rules. Adjusting business strategies to align with global efforts toward renewable energy should be a priority. Businesses that proactively embrace renewable energy can position themselves as leaders in sustainability and contribute to a greener future.

An all-clean technology approach to tackle climate change

Clean technologies and their role in addressing climate change were prominent at COP28.  The UAE Consensus, endorsed by 198 Member States, recognizes the urgency of transitioning the global energy system and emphasizes the need for a wide range of clean energy solutions. Further, the Consensus urges countries to swiftly transition away from fossil fuels in an equitable manner, accelerating action during this decade to ultimately achieve net zero emissions by 2050. To accomplish this, a diversity of approaches to managing emissions is required.

Luckily, collaboration with the private sector featured high. Inspired by COP26, various coalitions of the willing formed to tackle specific challenges in methane abatement, nuclear power and clean hydrogen and carbon management. Further, spearheaded by the United States, COP28 launched an initiative on artificial intelligence (IA) for climate action. IA has the potential to help advance and scale up effective climate solutions in both mitigation and adaptation efforts, especially in developing countries.

Implications for business:

Businesses that embrace and integrate technological innovation into their climate strategies are well-positioned to achieve their net-zero goals. However, they need to be mindful of challenges and risks associated with incorporating emerging technologies as well as their nascent supply chains into operations.  For climate tech companies, the enhancement of climate technology represents a prime opportunity to showcase solutions that address both mitigation and, crucially, adaptation. As the physical impacts of climate change intensify, illustrating how technology supports adaptation to a changing world becomes essential.

A win for nature, a miss for carbon markets

COP28 also delivered a big win for nature. It addressed the link between climate change and biodiversity loss while emphasizing progress in nature-based solutions, resilient food systems, ocean-based adaptation and targets to halt and reverse deforestation by 2030. Plus, 18 countries endorsed the Joint Statement on Climate, Nature and People, uniting for nature and placing it at the center of climate action.

Mobilizing capital toward nature featured prominently. Currently, finance flows to nature-based solutions represent only a fraction of financing required by 2030 to limit global temperature rise, halt biodiversity loss and achieve land degradation neutrality. At COP28, a significant number of banks agreed to follow some principles for nature-friendly finance and pledged US $100 billion by 2027.

But not everything was perfect. The carbon markets did not make much progress. Negotiators aimed to improve oversight of credit markets and specifics. Yet, carbon markets became a highly politicized topic at COP28, resulting in no decision and left to be a conversation to continue in COP29 in Baku, Azerbaijan.

Implications for business:

Businesses that embrace nature-positive practices, prioritize biodiversity and engage in transparent carbon offset initiatives will be better positioned for sustainable growth and resilience in a changing world. Biodiversity plays a vital role in corporate supply chains, and any disturbances to natural ecosystems carry inherent risks. To ensure long-term resilience, it is essential for companies to comprehend and proactively manage these risks. Importantly, as nations ramp up their nature-positive initiatives, companies should prepare for heightened regulatory scrutiny.