Clifford Chance

COP29, held in Baku, Azerbaijan, was beset by controversy and disappointment, but some progress was made. In this extract from a recent Clifford Chance webinar moderated by Roger Leese, a member of the firm’s ESG Board and co-head of the firm’s Global Business and Human Rights practice, we explore what was achieved including the announcement of a New Collective Quantified Goal on Climate Finance and agreement on the operationalisation of the global carbon market following a decade of trying. Read about what happened at COP29.

At COP29, the global community is meeting in the hope of driving critical progress on climate commitments. Against this backdrop, our London Environment Group has launched a new report which explores recent developments concerning the Paris mechanisms and the VCM and makes recommendations for actions that need to be taken if they are to reach their full capabilities. Read more about scaling the global carbon markets: a way forward for the VCM and Paris Mechanisms.

COP29 – the 29th annual United Nations climate meeting – takes place in Baku, Azerbaijan from 11 November, but what can be achieved, realistically, against a backdrop of geopolitical complexity? In this extract from a recent webinar moderated by Roger Leese, a member of the firm’s ESG Board and co-head of Clifford Chance’s Global Business and Human Rights practice, we look at the major issues that COP29 will cover, including carbon markets and climate finance. Read more about COP29 and what we can expect.

In this extract from our recent Perspectives webinar, we explore some of the major themes that came out of COP28, including renewable energy, financing and what it means for businesses. Read more about COP28 and what it means for businesses.

Following intense negotiations, COP28 has ended in a package deal which is being referred to as the "UAE Consensus". Read some of the highlights of the "UAE Consensus" and other commitments made in and around COP28.

As world leaders gather at COP28 in Dubai, there is widespread acknowledgment of the scale of action required to address climate change by accelerating the development of low-carbon energy sources, while also decarbonizing industry and transportation. This global energy transition will require largescale construction of renewables and other low-carbon energy infrastructure worldwide (particularly challenging in developing economies) as well as the development and implementation of new technologies and the scaling-up of existing technologies. Investments in batteries for energy storage and electric vehicles, carbon capture and storage (CCS), sustainable aviation fuels (SAF), and green hydrogen, among others, are needed to reduce greenhouse gas emissions in hard-to-abate sectors in addition to power generation. Read more about Funding the energy transition: Mobilizing private finance for net zero.

COP28 – the 28th annual United Nations climate meeting – takes place in Dubai from 30 November, but what can realistically be achieved against a backdrop of increasing geopolitical complexity? In this extract from a recent webinar, moderated by Roger Leese, co-head of Clifford Chance's Global Business and Human Rights practice, we explore some of the major themes that will be covered, including renewable energy, financing and the role of private capital, and carbon markets, and we contextualise what's on the agenda. Read more about looking ahead to COP28 and what we can expect.

Ahead of COP28, we set out our thoughts on the new generation of debt-for-nature swaps which have recently come to market and look forward to their full potential being unlocked at COP28 and beyond. Urgency around climate change, and the growing number of countries with high levels of debt vulnerability, in part as a consequence of the COVID-19 pandemic and monetary tightening, are driving renewed interest in debt-for-nature and debt-for-climate swaps. These factors, coupled with the general growth and mainstream acceptance of ESG investments, are reflected in investors' increased appetite for climate and conservation linked debt instruments. Read more about Debt-for-Nature Swaps: A New Generation.

The MENA region is experiencing rapid growth in green loans and sustainability-linked loans with issuers/borrowers ranging from sovereign wealth funds and GREs to financial institutions and corporates tapping into the ESG market. As the market grows, a number of trends are emerging, including the potential for the introduction of mandatory external reporting, the need for a harmonised regulatory framework and the diversification of products. Read more about the three emerging ESG finance trends in the MENA region.

The EU has adopted a Regulation establishing a Carbon Border Adjustment Mechanism (CBAM) to deal with the long-standing problem of ‘carbon leakage’ that impedes the EU’s decarbonisation plans. It is part of the Commission’s ‘Fit for 55’ initiative published in July 2021 that will help towards achieving the EU’s target for a 55% reduction in greenhouse gas (GHG) emissions by 2030 (against 1990 levels). Here we answer 10 key questions about the new Regulation.

Energy security and affordability have become a major issue for many countries. Rising inflation, increasingly frequent and significant climate events, and an uncertain geopolitical and economic outlook provide a challenging backdrop for governments committed to net zero targets and keen to accelerate the development of low-carbon energy. We highlight some trends which focus on some of the innovations and legal developments that we are seeing in a number of sectors to meet these challenges. View the Energy Transition Trends 2023.

Clifford Chance, in co-operation with UK Voluntary Carbon Market Forum and the City of London Corporation, has launched a new report: 'Enabling the Voluntary Carbon Market in the Context of the Paris Agreement'.

The Sharm el-Sheikh Implementation Plan agreed at COP27 concluded that a global transformation to a low-carbon economy is expected to require investment of at least USD 4-6 trillion a year. A high integrity scaled Voluntary Carbon Market (VCM) will be essential if we are to mobilise the capital required to achieve the Paris objectives. Investment in the Global South, in nature-based solutions, and in climate technology innovation is vital, and the VCM will facilitate and drive these capital flows.

Earlier this year the Forum undertook a market mapping exercise which sought to identify market gaps and potential actions. A clear conclusion of this work was that uncertainty around Article 6 of the Paris Agreement and what it means for the VCM is holding back urgent investment. 

This paper considers the state of the Paris mechanisms and the VCM, examines actual and perceived barriers to its scaling and identifies recommendations for the way forward.

On 30 November 2022, the European Commission adopted a proposal for a Regulation to create a first EU-wide voluntary framework that would certify high-quality carbon removals. The draft Regulation is part of the EU's drive to be the world's first climate-neutral continent by 2050. The proposal requires third-party verification and certification of the compliance of carbon removals with the QU.A.L.ITY criteria and the related certification methodologies that will be set out in delegated acts. This regime does not apply to the storage of carbon emissions which are already covered by the mandatory EU ETS. Read more about going beyond carbon reductions.

Agreement was reached by 190 countries on the Kunming-Montreal Global Biodiversity Framework (GBF) on 19 December 2022, after two weeks of negotiations at COP15 in Montreal. A key pillar of the GBF is a '30 by 30' pledge, with countries agreeing to protect 30% of land and water by 2030. This has led to the GBF being hailed by some as the Paris for nature, a comparison to the Paris Climate Agreement in 2015 which saw agreement for the first time on a common goal to cut greenhouse gas emissions. This briefing considers some of the key targets in the GBF. Read more about Nature's Paris.