“Focus and frictions remain intense” at COP29 following the event’s Finance, Investment and Trade Day, which took place yesterday (14 November), as negotiations around the New Collective Quantified Goal on Climate Finance (NCQG) continued.
Allegra Ianiri, research analyst at MainStreet Partners, noted the difficulties around leaders agreeing on targets but said there were reasons to be optimistic.
“Finance Day at COP29 centred on negotiations around the New Collective Quantified Goal on Climate Finance (NCQG), where focus and frictions remain intense, especially around setting a concrete quantitative target.
“Yet, there’s hope. New guidelines released yesterday morning by the Independent High-Level Expert Group on Climate Finance offer fresh insights, potentially paving the way for meaningful progress.”
Meanwhile, in an ESG Out Loud COP29 special Lorenzo Saa, chief sustainability officer at Clarity AI, told PA Future the presence of the finance community was less than expected, and the conversations were “a struggle” and “difficult”.
Despite this, investor groups with over $10trn in assets announced they’re uniting to develop a shared vision and action plan to accelerate the deployment of private capital into climate markets.
At an event hosted by the COP29 presidency and the UN Climate Change High-Level Champion, Nigar Arpadarai, representatives from the private sector, multilateral development banks and philanthropic organisations, climate funds, international organisations and civil society said they would hold a series of regular talks during 2025. This will culminate in an asset owners summit at COP30 in Brazil, at which they will share progress on the development and implementation of solutions and report on new capital deployed into climate solutions, including in emerging markets.
Arpadarai reinforced the importance of fostering inclusive ecosystems for the private sector to support the climate agenda, stating: “We need to create an ecosystem for businesses which will make the climate change agenda not only ambitious and mandatory, but also practical and achievable. Such a system should encompass more than a few corporations in the developed world and must reach beyond the usual suspects.”
In other developments, the Asian Development Bank (ADB) launched a new regional program to promote sustainable water use and food security in Central Asia, the South Caucasus and Pakistan amid the catastrophic impacts of melting glaciers.
With support from the Green Climate Fund, ADB will conduct glacier risk assessments in Azerbaijan, the Kyrgyz Republic, Tajikistan and Uzbekistan. These will form the scientific and technical basis for the program – called Glaciers to Farms – which envisages mobilising up to $3.5bn from a range of actors, subject to those institutions’ board approval processes. The program will also support vulnerable communities threatened by glacial melt, particularly in fragile mountain regions.
$1trn per year needed for developing countries by 2030
Elsewhere, the third report from the independent High-Level Expert Group on Climate Finance said that negotiations at COP29 should focus on securing $1trn per year by 2030 in external finance from all sources for the investments necessary to deliver the Paris Agreement.
The report warned any shortfall in investment before 2030 “will place added pressure on the years that follow”, creating a steeper and potentially more costly path to climate stability. It goes on to say that delayed action “means we will need to mobilise even larger sums in shorter timeframes to catch up on critical targets”.
Additionally, investment needs for adaptation and resilience, as well as loss and damage and restoration of nature, are expected to rise sharply as climate and nature risks escalate, further increasing the pressure to act now.
The authors wrote: “External finance from all sources, international public and private along with others, will need to cover $1trn per year of the total investment need by 2030 and around $1.3trn by 2035. We argue that cross-border private finance can meet about half of these needs given the changing nature of investment opportunities.”
The report has been published as countries negotiate a ‘New Collective Quantified Goal’ (NCQG) for financial support for developing countries beyond 2025. The previous goal of $100bn per year set in 2010 – which was only fulfilled in 2022, two years later than agreed – is set to expire this year, meaning a new goal is crucial.
“Advanced economies need to demonstrate a credible commitment, including through the NCQG, to provide and mobilise the finance needed for climate action in developing countries,” the authors observed.
“Other stakeholders also need to come forward with ambitious commitments, including multilateral development banks, the private sector and developing countries that are in a position to provide support.”
‘Growing scepticism’ over COP process
However, the absence of several global banking leaders, including Bank of America, BlackRock, Standard Chartered and Deutsche Bank, as well as national leaders from the world’s largest polluters, including the EU, China and the US, is causing “growing scepticism” in the COP process, according to Krishna Subramanyan, CEO of Bruc Bond, a boutique banking firm based in Singapore.
“The $1.8trn needed in climate adaptation finance by 2030 is a fundamental requirement for global economic stability. It appears that it will just have to wait for saner heads to work in smaller more determined action groups come COP30 in Brazil. COP29 is a re-set in thinking. Without strong representation from major financial institutions at these crucial negotiations, we risk severe delays in deploying capital where it’s needed most.
“The financial sector’s role extends far beyond direct funding – we shape market signals, influence investment patterns and help determine the speed of the global transition to sustainable practices. What we need to see at COP29 is this change in direction to more determined action that also has the optics of appearing so.”
Adding to these growing concerns, an open letter addressed to Member States of the UN and executive secretary of the UNFCCC Secretariat, Simon Stiell, says that the global climate policy process “is no longer fit for purpose” and requires a comprehensive overhaul to ensure planetary stability and a liveable future for humanity.
The signatories propose seven key reforms to ensure a COP that can deliver on agreed climate commitments and ensure the urgent energy transition and phase-out of fossil fuels. These include:
- Improving the selection process for COP presidencies with strict eligibility criteria
- Streamlining the process for speed and scale; improving implementation and accountability measures
- Improving implementation and accountability to hold countries accountable for their climate targets and commitments
- Creating robust tracking mechanisms for climate financing
- Amplifying the voice of authoritative science
- Recognise links between poverty, inequality and planetary instability
- Enhance equitable representation by introducing stronger transparency rules requiring companies to demonstrate alignment between their climate commitments, business model and lobbying activities
Sandrine Dixson-Declève, executive chair of Earth4All and global ambassador of the Club of Rome, was one of the signatories. She said: “We need a COP process that offers delivery, not delay. We demand COPs that are platforms for government and stakeholder ambition, not enablers of fossil energy contracts and growing greenhouse gas emissions. After 28 COPs, time is up for negotiations that don’t foster action and implementation. Planetary stability is dependent on equality, justice and poverty alleviation to address the greatest existential challenge of our time.”
