COP29 Begins
Business at the Forefront of the International Climate Negotiations

The 29th annual Conference of the Parties to the UN Framework Convention on Climate Change, or COP29, opens this week in Baku, Azerbaijan, offering a unique opportunity for US businesses to demonstrate private-sector leadership in the global climate arena. As climate policy accelerates globally, COP29 highlights the importance of proactive business involvement, particularly from sectors capable of driving sustainable solutions. By attending COP29, ASBN/C member companies have the chance to showcase their leadership, engage with a global community dedicated to addressing this shared crisis, and explore opportunities for collaboration across borders.

Amidst these high-stakes discussions, US businesses can help to shape international frameworks that promote both climate resilience and economic growth, underscoring the power of public-private partnerships in the transition to a sustainable global economy through ambitious climate action.

Regional Crossroads

As representatives from nearly every nation gather to further global climate agreements, the choice of Azerbaijan as host underscores a strategic shift in climate diplomacy, recognizing the critical role of regions at the crossroads of major energy and economic corridors.

Situated on the western shore of the Caspian Sea, Baku lies at a key geographic intersection between Europe, Asia, and the Middle East. For decades, Azerbaijan’s economy has relied heavily on its oil and gas sector. Hosting COP29 in Azerbaijan shines a spotlight on the challenges and opportunities facing oil-producing nations that are now diversifying their economies for a more sustainable future.

This context underscores the complexity and importance of climate action in regions where economic transformation must go hand-in-hand with emissions reductions—lessons that are particularly relevant for US businesses navigating their own transitions toward net-zero.

Trump’s Re-election & Affects on US Business Climate Leadership

For US businesses observing COP29, the recent election of President Trump casts an uncertain shadow over America’s climate diplomacy. As a known climate change skeptic, Trump’s re-election has influenced the country’s positioning at COP29, and his administration’s stance may alter US involvement in critical areas, including the pursuit of collaborative international climate finance and support for voluntary carbon markets.

Trump’s presidency signals a shift that could place the US at odds with more ambitious climate goals that have garnered broad international support. For American businesses, this administration’s reluctance to fully engage in multilateral climate frameworks may introduce new challenges in aligning corporate climate strategies with emerging international standards.

Yet, as sustainable business becomes central to competitive advantage, American companies may find themselves at the forefront of climate leadership, even where government support is hesitant.

Anticipated Progress

As negotiations at COP29 unfold, Article 6 of the Paris Agreement remains a critical piece. This provision establishes guidelines for the international trading of carbon credits, which, if effectively implemented, could unleash vast capital for climate action through a credible and standardized carbon market. Progress on Article 6 would enhance transparency and confidence in the global carbon market, creating a robust framework that US companies could engage with, both as buyers and sellers of carbon finance.

Additionally, a substantial milestone in Baku is anticipated around the New Collective Quantified Goal, targeting $1 trillion in climate finance by 2030. This goal represents a recognition of the economic scope needed to confront climate change, with impacts likely to affect sectors from energy to agriculture.

The private sector, particularly from the US, will be instrumental in achieving this level of financing, either through direct investments, partnerships, or innovative financing solutions.

The Importance of Regional Coalition Climate Leadership

With President Trump’s administration providing limited leadership on climate, regional coalitions around the world are going to need to step up to drive climate action and fill the void.

Regional alliances such as the European Union and the Latin American Alliance for Climate Action demonstrate that collaborative, cross-border efforts are making significant strides in reducing emissions, enhancing resilience, and developing renewable energy infrastructure.

These efforts are proving essential, creating a framework for climate action where national commitments may lag. For US businesses, the emergence of these regional initiatives offers stability and continuity in international climate policy, opening opportunities for engagement, investment, and partnerships that align with the latest sustainable practices. By aligning with these initiatives, US businesses not only contribute to global climate goals but also maintain their competitive edge as part of a rapidly transforming international market that increasingly values low-carbon solutions and resilience.

These regional alliances, advancing climate progress and innovation, provide an essential counterbalance to national policy gaps and offer the US private sector pathways to demonstrate leadership on a global stage.

A Decentralized Approach

The change in tone in US federal policy will also create an opportunity for US State leadership to come to the forefront.

States that are already putting Inflation Reduction Act (IRA) funds to good use have already begun to step in, helping to sustain and even accelerate progress where federal action falls short. States like California, New York, and Washington have enacted their own ambitious climate policies, from strict emissions reduction targets to renewable energy mandates, proving that meaningful progress can be made at subnational levels.

These state and local governments are increasingly collaborating across borders with regional entities in Canada, Europe, and beyond, forming coalitions that drive policy innovation and offer models for broader climate action.

For US businesses, these regional frameworks are critical, as they provide continuity and forward momentum in climate policy, creating a stable environment for sustainable investment and business planning. This decentralized approach also allows companies to align themselves with progressive climate policies and join regional initiatives that support emissions reductions, thereby filling the leadership void and ensuring that the US private sector remains a competitive force in the global shift to a low-carbon economy.

COP29, Shaping the Economic Landscape of Tomorrow

For all of us, COP29 is not merely a political event but a pivotal moment shaping the economic landscape of tomorrow.

As American companies increasingly see value in environmental stewardship and resilience, the decisions made at COP29 will resonate across supply chains, financial markets, and competitive landscapes. Strong climate commitments bring stability to economies, open new markets, and stimulate innovation in everything from clean energy technologies to carbon capture.

For the US business community, engaging with and understanding the outcomes of COP29 will be essential for navigating future markets, anticipating regulatory shifts, and aligning with global sustainability standards that could offer a strategic edge in a world driven by responsible growth. As the global community negotiates pathways toward a climate-resilient economy, US businesses are not just stakeholders but catalysts for meaningful, durable climate solutions.