What to expect from COP30 – and how your business can get prepared

1. UK’s new climate targets have knock-on effects for business

Governments were required to submit their updated national climate plans (called Nationally Determined Contributions, or ‘NDCs’) in early 2025, but many of them missed the deadline. At the time of writing, around a quarter (26%) of countries had submitted their new action plans to the UN. This COP should see a late flurry of submissions of NDCs from participating countries, raising ambition on their climate goals. The UK has already submitted its updated NDC this year, with a commitment to reduce all greenhouse gas emissions by 81% by 2035, compared to 1990. This new NDC will have wide-ranging regulatory and operational impacts for businesses, since achieving the targets set out at national level will involve the participation of, and produce impacts on, the whole UK economy.

Under the new NDC, we can expect stricter rules for businesses across energy efficiency, waste, and emissions reporting. This means companies will face higher compliance obligations, additional scrutiny from regulators and investors, and a greater pressure to disclose credible climate strategies. This was also a hot topic in the Department for Business and Trade’s recent consultation on the new UK Sustainability Reporting Standards.

Companies that proactively decarbonise will be better placed for incentives from the government, and will safeguard demand from environmentally-conscious customers. Transparent reporting and science-based targets will not only satisfy investor expectations but may also lower finance and insurance costs. 

2. Convergence of carbon markets and Article 6 

At last year’s COP in Azerbaijan, there was a lot of fanfare surrounding the completion of the rules for making use of Article 6 of the Paris Agreement - which covers the use of carbon markets for meeting countries’ climate goals.

As such, Article 6 is reshaping both the role and the rules of carbon markets, including placing even greater emphasis on the quality of carbon credits. For businesses, the days of using cheap, low-quality credits to offset emissions are long over. Instead, any use of credits will need to be demonstrably robust, linked to verified climate benefits, and not double-counted by both companies and governments - including with appropriate Corresponding Adjustments from projects’ host countries.

Whilst we now have the legal and technical clarity to move forward with Article 6 and scale climate action through carbon markets - and over 100 countries are keen to take part - very few countries have taken the necessary steps to get moving and overall, readiness is low. Investor enthusiasm in the new market is currently high, but this means that this is a crucial time window for getting the PACM meaningfully up and running. At the same time, exactly how the PACM gets up and running will significantly impact demand signals and anticipated supply of different types of credits in the market in the coming years - with huge impacts on the price businesses might have to pay for the carbon credits they’ll need as we approach 2030, and longer-term corporate net-zero targets.

3. Forests in focus, with implications for carbon markets

The first-ever COP to take place in the Amazon was always going to place forests and biodiversity at the centre of discussion. Brazil’s ambitious plan for a $125B Tropical Forests Forever Facility (‘TFFF’) will spotlight the importance of conservation and deforestation-free supply chains. The aim is to construct a mechanism for using blended finance to financially reward forest conservation efforts and punish forest destruction or degradation.

The proposed model is well-developed already, having been discussed at the COP16 biodiversity COP in Colombia last year. Proposals even include the specific financial figures in play for eligible countries: rewards of $4 USD per hectare of intact forest, with huge deductions from the total reward for each hectare lost. In addition, the plan is 20% of disbursements to be directed to Indigenous Peoples and local communities (‘IPLCs’).

The TFFF is an interesting development and a compelling incentive scheme for countries to keep their forests intact - however, there are implications for businesses, primarily in relation to how the scheme interacts with existing REDD+ and J-REDD forest carbon projects. If tropical forests in places like South America are already being protected, there is an implication that this would reduce the additionality of carbon credits issued to REDD+ or J-REDD programmes in those countries.

The most recent concept note for the TFFF however does stress that the scheme is designed to supplement existing REDD schemes rather than compete with them - but exactly how that shakes out will be of interest to businesses interested in these types of carbon credits.