Daniel Mikkelsen, Senior Partner, and leader of McKinsey Sustainability’s financial work opened the session by sharing key takeaways from his attendance at last year’s COP, which took place from 11th to 22nd November in Baku, Azerbaijan.
He set the stage by outlining the global climate policy landscape: implementation efforts remain significantly off-track to meet the Paris Agreement's 1.5°C goal, with current trajectories pointing toward a 2.2°C to 3.5°C emissions outcome. Despite these challenges, there is reason for optimism: 66% of the world’s largest publicly listed companies have now committed to net zero targets, signalling the potential for greater synergy between policy and business decision-making.
Some of strategic priorities at COP29 were the setting of a new global climate finance goal – the New Collective Quantified Goal (NCQG); progress on countries' updated Nationally-Determined Contributions (NDCs); and increased clarity on carbon market rules in accordance with Article 6 of the Paris Agreement.
Mikkelsen offered practical insights for how boards can incorporate COP29 into their boardroom discussions:
- Rethink sustainability strategy – COP29 provided a pivotal moment for reflecting on sustainability strategies and recalibrating the scale and pace of climate transition plans. With NDCs being announced by governments—including the UK—boards have an opportunity to assess how evolving policy landscapes and technological advancements can influence target-setting, risk management, and long-term planning.
- Expedite competitive technologies – Research shows that only 10% of the low-emissions technologies required by 2050 to support the net zero transition have been deployed, with focus very much needed on how to effectively scale up and industrialise technologies. McKinsey's analysis highlights 12 core technologies that could deliver 90% of the required emissions abatement required and should be prioritised accordingly. Increasing technology readiness and maturity levels in key climate technologies is critical to enabling businesses to scale production assets and reduce the costs of transition-aligned infrastructure, which may help to create long-term strategic value.
- Unlock private capital to bridge the finance gap – While progress is being made, private capital remains a small proportion of the actual capital that is being mobilised, especially in developing countries. Multilateral financial institutions are doing more to provide capital and crowd in private sector finance, but many sustainability projects continue to need greater financial and regulatory support to become investable. Boards can be proactive in identifying where these needs exist and what forms of support may be most effective in filling existing financing gaps.
- Prepare for carbon as an investable asset – COP29’s agreement of a UN-backed carbon market framework is expected to unlock further investment potential in climate projects and support cross-border collaboration on emissions reduction strategies. With the proper integrity safeguards and transparency framework in place, these new rules could offer businesses confidence and clear guidelines for the international trade of carbon credits. In parallel, there have been policy signals (again, specifically in the UK) around increased investment in carbon technologies, with estimates by McKinsey & Company that the carbon dioxide removal industry could be worth up to $1.2 trillion globally by 2050.
- Harness digital technology to boost and de-risk transition delivery – The growing importance of digital technologies was reflected in the first-ever Digitalisation Day at COP29. Research shows that one half of the technologies and initiatives required to put the world on a 1.5°C emissions pathway can be enhanced through digitalisation, representing a major opportunity for boards to assess opportunities for enhancing the role of digital technologies in strategy delivery.
Enhanced business ambition on the road to COP30
We hosted a panel moderated by Susan Hooper, board member, Chapter Zero, and featuring panellists: Vanessa Havard-Williams, Chair of the Transition Finance Market Review, HM Treasury; Thomas Lingard, Global Head of Sustainability, Unilever; and Fiona Howarth, CEO, Octopus Electric Vehicles.
The panel discussion began with reflections on some areas of increased ambition at COP29, for example the announcement of the UK’s updated NDC, and how this may support a more consistent enabling environment for businesses’ climate strategies. Participants commented on the importance of clear policy direction from government for business planning and how greater recognition of the private sector’s role in delivering net zero could help to direct boardroom strategies. Consistent policy and market signals were seen by panellists as particularly beneficial in terms of target-setting, including reinforcing targets such as Scope 3 emissions reductions, which are outside the direct control of individual companies. Panellists discussed how tackling emissions across the value chain can often require cooperative action between private and public entities and supportive policy and regulatory frameworks, alongside alignment on an actionable timeframe.
Building on the discussions around enabling factors, one panellist reflected on the importance of sector-level pathways to net zero. Without a stable policy environment within and across sectors, they commented that the finance needed to deliver on cross-sectoral decarbonisation is unlikely to flow at scale. Panellists agreed that the operationalisation of finance needs to be a key area of focus going forward, and that it would be beneficial for innovative forms of blended finance and industry partnership to be explored at pace. There was panel-wide agreement that progress on these important levers could lower the risks associated with many long-term sustainability projects and crowd in the capital needed to deliver them.
Audience members were updated on several ongoing efforts from COP29 that are likely be carried forward into COP30 next year in Brazil, including developing discussions around the role of raw material supply chains in scaling up decarbonisation and the push for a new binding global treaty on traceability for critical minerals. Nature and biodiversity, and topics such as loss and damage financing, were also flagged as likely to be higher on the agenda at COP30 in November 2025.
Key takeaways
Some of the key takeaways to emerge from the session for boards from COP29 could be summarised as:
- Strategic alignment – non-executive directors can use the emerging policy signals, particularly in the UK, to support long-term strategic planning in line with their stewardship role in relation to ensuring that organisations are properly balancing performance expectations with long-term sustainability objectives. Businesses that have set ambitious climate goals could now benefit from staying the course and maintaining strategic oversight of the mechanisms and technologies needed to transition. Aligning climate strategies to these broader policy and market signals, could enhance long-term business resilience, not only in terms of derisking portfolios and activities, but also in driving value and attracting investment.
- Stakeholder engagement – there is a huge opportunity for businesses to communicate across their stakeholder maps about their transition priorities. Business-government dialogue may also help ensure that policy and regulation reflect business reality and is geared towards impactful, measurable progress, while also being clearer about where policy interventions are not working. How businesses engage with the policy landscape will be entirely context-dependent, but for boards it will remain crucial to understand the direction of travel for policy and build this into scenario planning and strategic decision-making.
- Global cooperation – COP29 highlighted again that the climate crisis is a global problem that requires a global response. Businesses can foster opportunities for collaboration and innovative forms of industry partnership, both across sectors and geographies, to support climate resilience.