Baku sends a mixed message

How do you evaluate the outcome of the COP?
Bettina Storck: Even before it had started, the World Climate Change Conference in Baku was already being referred to as the Climate Financing COP. Several agreements had to be renewed or made actionable.

A new climate finance target was at the top of the agenda, as the previous agreement, which granted 100 billion dollars annually to countries particularly affected by climate change, is expiring. It was also necessary to decide on the financial resources for the fund established at the last COP to "respond loss and damage". Also, as a perennial item on the agenda, the establishment of market mechanisms for global carbon markets was again discussed this year.

Interests couldn’t be more different. This was clearly demonstrated in Baku once again, the demands of developing countries for more financial support on the one hand, and the industrialised nations’ aim for a secure framework for sustainable investments on the other hand. Both have shaped this year's COP. Additionally, China’s significance as one of the largest CO2 emitting countries, is steadily increasing.

The industrialised nations aim to triple their payments to 300 billion dollars per year by 2035, including contributions from development banks. However, no concrete decisions on CO2 reduction or climate protection were made. Biodiversity protection is not mentioned in the final agreement. Compromises have at least enabled a final agreement.

It remains unclear exactly how the "phasing out of fossil fuels" will be achieved. The hope for progress has been postponed to next year’s conference in Brazil. In short, Baku sends a mixed message of many unfulfilled expectations.

What does the outcome of COP29 mean for EU climate policy?
Regardless of COP, the EU climate targets remain intact. Sustainability and the fight against climate change are key political priorities for the European Union – even if overshadowed by issues such as defense policy. It remains to be seen what priorities the new European Commission will ultimately set, but it’s already clear that sustainability will remain an essential part of the agenda. The reduction of bureaucracy is also becoming a major concern in this field. Regulatory requirements should be simplified as companies need room for maneuver. As a result, transition finance will become the core priority of sustainability efforts in Europe. Without accelerated decarbonisation, the EU's climate targets can’t be met.

Do the COP and the enhanced focus in the EU have a concrete impact on Commerzbank's sustainability strategy?
We need to look at it in more detail. However, our goal to reduce the emissions of our entire investment and lending portfolio to net zero by 2050 at the latest remains unaffected.

We’ve long been committed to placing the transition at the centre of our efforts. Many companies – in Germany, Europe and worldwide – are currently in this phase. This should be reflected both in financing and in the corresponding taxonomy.

An independent, streamlined framework for Transition Finance would facilitate this task and accelerate the shift towards sustainability. This should include standardised reporting requirements based on international standards.

At Commerzbank, we’re prepared to support our clients and direct financial flows towards sustainable investments. In 2025, a team of ESG advisory experts will operate from six locations across Germany. Our deep sector expertise will contribute to our ability to guide our clients in these topics.

The quicker we can help our clients to transform, the more we can achieve for climate protection.