Principal Strategy & Action Partner

COP28
STRONG PROGRESS FROMDUBAI AND THE ROAD AHEAD

DECEMBER | 20230

Preface
COP28 was the most important COP since the Paris Agreement in 2015. 2023 is the year of the Global Stocktake, halfway to 2030.
Progress to date has clearly been inadequate on all fronts across countries, the private sector, technology and finance, so there isan urgent need to go faster, starting now.
To address the Stocktake and these challenges, the COP28 President, Dr. Sultan Al Jaber, set an ambitious "Action Agenda" acrossenergy, finance, lives and livelihoods, and inclusion. The COP28 Presidency mobilized countries to operationalize and seed theloss and damage fund with 792M USD and this COP finally includes bolder direct statements about the energy transition andfossil fuels in the final text, something the prior 27 COPs had failed to achieve. The results across both the Action Agenda and thefinal negotiated statement (the “UAE Consensus”) have exceeded virtually all incoming expectations and lay the foundation for
accelerated progress in the years ahead to tackle climate change and attempt to limit temperature increases to 1.5°C.
BCG has been a partner to the Presidencies for COP 26, 27, and now 28. This year we served as the Principal Strategy and Action
partner. BCG supported COP28 by providing strategic insight and analysis, sectoral and technical expertise and action agenda
implementation support across a number of topics including renewables, hydrogen, climate finance, green capital markets,
decarbonization of heavy emitting sectors, food system transformation, nature, adaptation, and more. It has been a privilege for us
to contribute to the COP Presidency and to participating countries, businesses, and NGOs around the world to make the most of
this COP, with 60+ BCGers involved in various COP-related efforts.
This document is intended to provide a summary overview of what has been achieved, what it means, the challenges ahead, andwhere you can learn more on particular topics of interest. We hope you find this helpful, along with the links to the many otherreports embedded in the document.

Christoph Schweizer
Chief Executive Officer

Rich Lesser
Global Chair

1

COP28 in picturesand numbers~97,000 Attendees

Launch of Alterra, $30B climate fund tomobilize $250B private capital by 2030~$1.2BN announced as
mobilized in 2023 to support
methane abatement

198 UNFCCC Official Parties
150+ Heads of States andGovernment~14,000 NGO Observers

Announcements
made on Food & Ag

Launch of Global Cooling Pledge

Launch of Industrial Transition Accelerator (ITA)
Launch of Renewables and Energy Efficiency Pledge~4,000 Media
2

Contents

1. Context of COP28
2. Action Agenda
3. Negotiated Outcomes
4. The Road Ahead
Appendix
Deep Dives:
COP28 Action Agenda Outcomes31. Context of COP28

Climate change is the defining challenge of our time2023 will be the hottest year on record, and we are significantly off track from a 1.5°C trajectory

Global average temperatures reached 1.46°C above
pre-industrial levels in 2023
Surface Air Temperature1 (°C)

Current policies put us on track for 2.9°C – we need
a 43% emissions reduction by 2030 to reach 1.5°C
GtCO2e60

172.9°C | Current policies

16

2.5°C | Implementationof commitments2

50

1991 –2020 avg
15
2023

14

40

2022

13

Gap due tomodelling from2020 baseline

22
GtCO2e30

121.5°C | Paris Goal3

11
Jan

Feb

2023

Mar
2022

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

20
2015

2020

2023

2025

2030

1991-2020 avg

1. Surface Area Temperature refers to temperature measured at 2 meters above the surface; 2. Based on NDCs submitted to UNFCCC. 3. Modelling conducted from 2020 baseline using projected2020 emissions.
Note: Emission gap for 2°C pathway estimated to be ~14 GtCO2e (UNEP Emissions Gap Report 2023).
Source: ClimateReanalyzer.org; Climate Change Institute; University of Maine; Climate Action Tracker

41. Context of COP28

A quick recap of milestone COPs

Rio EarthSummitestablished
UNFCCCParis Agreement set
the goal of limiting warming
to "well below 2.0°C" &"best efforts for 1.5°C”

Sharm el-Sheikh
elevated adaptation,
loss and damage

1997

2021

2023

COP 3

COP 26

COP 28

1992

Kyoto Protocol
Parties committed toemissions reductions

COP 21

COP 272015

2022

COP28 is a critical
milestone.
It is the year of the
Global Stocktake,which is the midway
point between the
Paris Agreementand 2030.

In Glasgow, Parties
agreed to phase down
unabated coal5

1. Context of COP28

COP28 delivered a bold Action Agenda and a landmark negotiated outcome

Dec 1

Dec 2

World
Leaders
Summit

Dec 3

Dec 4

Dec 5

Dec 6

Dec 7

Dec 8

Dec 9

Dec 10Dec 11

Dec 12

Action Agenda
Action Agenda delivered commitments and progress from high ambition
countries, businesses & civil society organizations across the climate agenda.

Formal Negotiations Agenda
The Negotiated Agenda delivered a comprehensive roadmap intended to keep 1.5C within reach.
This roadmap is known as the "UAE Consensus", agreed by 198 Parties.
Note: COP28 held the World Climate Action Summit on 1-2 December 2023. Thematic days ran from 3-10 December with a rest day on 7 December. December 11-12 had no themes
1. The thematic days spanned the following topics: Health, Relief, Recovery & Peace; Finance, Trade, Gender Equity, Accountability; Energy, Industry, Just Transition and Indigenous People; Multilevel
Action, Urbanization and Built Environment, Transport; Youth, Children, Education and Skills; Nature, Land Use, and Oceans; Food, Agriculture and Water

6

2. Action Agenda
Renewables and Energy Efficiency (RE & EE)
New sectoral target rallying global action to accelerate deployment01• 130+ countries (2/3 of GDP) committed to triple RE capacity and double EE improvements globally by 2030
• Countries commit to reflect this goal in their own actions and NDCs
• The Global Stocktake saw 198 parties agree to contribute to the global targets
Methane (Oil & Gas)
Broad commitments, funding & technical support to accelerate abatement

02

5 Areas ofDecisive
Progress
COP28 Action Agenda• 50 companies, representing 40% of oil production, committed to near-zero methane by 2030 and net zero for
Scope 1&2 emissions by 2050 or earlier• ~1.2B new funding announced for methane abatement, including $255M for World Bank fundHeavy Emitting Sectors (HES)
Substantial progress towards scaling supply and demand of decarbonized solutions

03• Launch of Industrial Transition Accelerator, first ever cross-sectoral initiative that aims to accelerate decarb of HES• Represented by ~50% of cement & aluminum, ~80% steel, ~40%+ power production, ~80%+ air traffic• Governments, for the first time ever, agreed to new green procurement commitments through UNIDO IDDI
Food and Agriculture
Raised ambition for food system transformations supported by business and finance04• 150+ countries committed to food targets in climate planning, with $200M in new technical support• 25+ leading agriculture orgs committed to transition 160M hectares to regenerative ag by 2030 accompanied by$2.2B investment
Finance
Over $85B new funding raised, including innovative private finance at scale05• Launch of ALTÉRRA, $30B climate fund with $5B risk mitigation capital, aiming to mobilize $250B by 2030
• The World Bank unlocks $14B for climate and clean energy in Africa• Parties pledged $792M in Loss & Damage funding ahead of the opening of the negotiations

77

2. Action Agenda
Nature and Water
COP28 increased momentum on Nature-based Solutions for climate

06• $2.9B of new funding for Nature-based Solutions and Water projects worldwide• 37 countries joined the Freshwater Challenge, a country-led initiative to protect & restore freshwater ecosystems• 150 businesses and Financial Institutions engaged in discussions to develop nature positive plans
HealthMomentum built on Climate & Health (C&H), via Pledge and funding announced

07

5 Areas ofGrowing
Momentum
COP28 Action Agenda• 144 countries signed the Declaration on C&H, which seeks to incorporate health considerations in thecontext of the relevant Paris Agreement & UNFCCC processes• 41 organizations endorsed Guiding Principles for Financing Climate & Health solutions
Climate Adaptation and Resilience
Public & private sector call to action on significance of Adaptation & Resilience (A&R)

08• 74 countries committed to enhance A&R efforts and access to finance• Private financing opportunities in A&R highlighted in PREPARE call to action• Financial architecture reform, including new MDB commitments on A&R finance and climate-resilient debt clauses
Voluntary Carbon Markets
Progress on defining unified standards to ensure credibility and transparency

09• New Integrity Framework by coalition of standard bodies to accelerate unified and clear standards• Launch of Energy Transition Accelerator: carbon finance platform to catalyze private finance to developing countries• Launch of clean coal credit initiative to support early retirement of coal plants
Hydrogen
Unlock of international hydrogen trade to enable growth in demand10• Launch of new ISO specification (ISO/TS 19870) to calculate low carbon H2 GHG emissions, which can enable
universal emission standards for low-emission hydrogen market• 37 countries endorsed Declaration of Intent on mutual recognition of low-carbon hydrogen certification schemes

88

3. Negotiated Outcomes

A Breakthrough Year for the COP Negotiation Agenda

OutcomeSee next slide

Implications

Mitigation (under the GST decision)
Parties agreed on the main building blocks of global energy
transition including tripling renewables, doubling energy
efficiency and transitioning away from fossil fuels1• Greater clarity and confidence on the speed andshape of the energy transition• Increased support and investment in key
elements of the transition e.g., renewables, CCUS

Global Goal on Adaptation
Parties agreed sector-specific resilience objectives, urged
development national adaptation plans by 2030, and called
for doubling of adaptation funding to close finance gap.

• Quantity, quality and comparability of national
adaptation planning will improve• Better pipeline of adaptation projects andincreased funding flows

Nationally Determined Contributions (NDCs)
Parties agreed that the next round of NDCs should cover all
emissions, sectors and categories. Next round of NDCs will
have targets for 2035 and are due by end 20241• Comprehensive NDCs improve transition
pathways and policy frameworks• Increased clarity and confidence for business andinvestors• Increased funding for losses and damages
suffered in the most climate-vulnerable, least
culpable countries

Loss & Damage
Parties agreed to operationalize a Loss & Damage Fund that
was approved in principle at COP27. $792M has beencommitted for capitalization and administration. 1,2

1. Matters relating to the global stocktake under the Paris Agreement. Draft decision -/CMA.5. Proposal by the President, UNFCCC 2023; 2. Operationalization of the new funding arrangements forresponding to loss and damage and the fund established in paragraph 3 of decisions 2/CP.27 and 2/CMA.4, UNFCCC 2023; 3. Glasgow–Sharm el-Sheikh work programme on the global goal on
adaptation referred to in decision 7/CMA.3, UNFCCC 2023

9

3. Negotiated Outcomes

The BIG win
This political consensus on energy must be delivered in line with the science

Provides an evidence-based view of
the crucial elements of the energy
transition and the actions requiredof the key stakeholders
10

4. The Road Ahead

Companies

•
•
•
•
•
•

AN AGREEMENT IS
ONLY AS GOOD AS ITSIMPLEMENTATION.
THIS HISTORICCONSENSUS IS ONLY
THE BEGINNING OF
THE ROAD
H.E. Dr. Sultan Al Jaber
President, COP28 UAE•

Governments •••MDBs, IFIs, •FIs, and•Philanthropy •Deliver and expand existing commitments and initiatives
Transparently report progress against commitment to global best practices
Advocate with consistency for the policy measures required to accelerate
Collaborate across value chains to support partners’ decarbonization
Invest in advanced technologies needed to reach net zero, alone or withothersConsider Nature Positive plans to also reflect impact on nature`

Revise NDCs in line with 1.5°C based on robust national pathways acrossall sectors and considering food systems
Implement robust policy measures to enable investment in climate,drive market signals, remove market frictions (e.g., permitting, rules),and embed price of carbon
Drive demand through green procurement e.g. green steel, cement
Increase investment in adaptation

MDBs/IFI: Accelerate reforms to unlock deployment of capital; Launch new
new instruments to finance all climate needs, including adaptation
FIs: Increase share of portfolio focused on climate finance
Philanthropy: Deploy grant and catalytical capital in support of energy
transition, adaptation and wider low-carbon transition efforts

11Appendix
Deep Dives - COP28 Action Agenda
12

01

RE & EE | 130 governments commit to triple renewable capacityand double the rate of energy efficiency gains by 2030
Key takeaways from COP28

Key facts
Commitment addresses at least 41% of
the abatement required by 20302. To
keep 1.5° in reach we need to:• Grow RE capacity from 3.6 TW to
11TW by 20301• COP28 Presidency prioritized renewables and energy efficiency in the run-up to COP28 in response to the clear recommendationsof the IPCCC, IEA and GST Technical Report that these are critical abatement levers this decade• As part of Action Agenda, the Presidency partnered with the EU to encourage countries to commit to 1.5°C aligned target,
alongside commitments to new policy measures and progress reporting; 130 endorsers representing over 2/3 of global GDP• Energy Transitions Commission estimated the mitigation impact of this initiative to be 6 – 9 Gt by 20303• Momentum carried into negotiations with a matching commitment from all 198 parties in the Global Stocktake• Increase EE improvements from ~2%
p.a. annual to 4% by 20301• Investment in grids needs to at least
match that in new generation• Investment of $29.5T required to2030; private sector can fund share
if new policy measures enacted1• 2x capital costs threatens energy
transition in developing countries2

BCG@COP28
Read more on
the roadmap to
triple RE anddouble EE,
published by
COP28, IRENA,
and GRA with
BCG support

Key Announcements @ COP28
12

3

Renewables & Energy Efficiency Pledge• Commits to triple RE installed capacity to 11,000 GW
by 2030• Commits to double EE improvements from 2% to 4% per year
and make it ‘first fuel of choice’• Commits to taking comprehensive action including reflecting
this in NDCs and adopting ambitious policy• Recognizes the key enablers including permitting, grids,
supply chains, market design, and efficiency initiatives• Recognizes the need for international collaboration, esp.
financing, supply chains, inter-connections• Commits to review progress on an annual basis

Renewables financeannouncements of €2.3B by
European Commission for theenergy transition and $568M by
the US for clean energy andsupply chains6
Private sector actors alsoannounced new financing,including Copenhagen
Infrastructure Partners' $3B
fund for clean power inemerging markets5

The Global Stocktake
called on Parties tocontribute to the global
effort of tripling
renewable energy
capacity globally anddoubling the global
average annual rate ofenergy efficiency
improvements by 2030

Read the COP28 declaration
1. Tripling Renewable Power and Doubling Energy Efficiency By 2030 Crucial Steps Towards 1.5°C, COP28, IRENA, GRA 2023; 2. Net Zero Roadmap A Global Pathway to Keep the 1.5 °C Goal in
Reach, IEA 2023; 3. COP28: A High-Level Assessment of Mitigation Proposals, Energy Transitions Commission; 4. GRA; 5. Press reports; 6. COP28;

13

01

RE & EE | Governments and businesses must collaborate toaccelerate renewable energy and energy efficiency improvements
Implications for leaders

Actions to take

Increased policy support for RE & EE deployment may be paired withlocal content requirements; as full localization is difficult, regional
diversification will become more important

Renewables supply chain players should embrace policy makerengagement to:• Improve competitiveness of regional manufacturing• Drive for regional diversity of full supply chain• Create demand needed signals for build out

Power price volatility, particularly in markets with high share of variable
RE, weak grids, and limited balancing opportunities via interconnections
Value of demand side flexibility will increase massively over time
Risk of stranded assets due to decline in demand for fossil fuels fromrising renewables share and improved efficiency

Pressure on supply-chains and competition for critical minerals andskilled labor as rapid deployment accelerates demand

Read more on BCG's
blueprint for the global
energy transition

Energy Efficiency solution providers should aim to:• Industrialize building stock modernization and build heat storageand networks• Electrify industry and transport, and leverage AI-based optimization
Policymakers should enable scaling by:• Accelerating permitting• Redesigning energy markets to accelerate and de-risk buildout• Triggering anticipatory investments into grid build out• Driving for transparent standards and accountability• Reexamining fossil fuel subsidies and ensure energy prices reflect
pollution and climate costs

Read more ontransitioning to asustainable power system

Read more on theoutlook for the windenergy supply chain

14

02

Methane (O&G) | Governments implement new regulation and50+ O&G companies commit to near zero methane by 2030
Key takeaways from COP28

Key facts•

CH4 is 80x more potent thanCO2, accounts for ~30% of
global warming to date•

Anthropogenic emissions must
fall by 30-60% by 2030 for 1.5°C•

Key sources are energy (37%),
agriculture (40%), waste (20%)•

Over 75% methane from O&G
industry can be abated withexisting well-known technology,
majority with positive NPV

COP28 accelerated the growing momentum on abating methane from O&G ops., building political commitment and cooperation
Governments step-up policy and regulation to incentivize and accelerate methane abatement:• The USA EPA announced regulation to cut methane emissions by 80% over 15 years• The EU adopted its first methane regulation to report and avoid emissions• Canada announced regulation to reduce methane by 75%+ from 2012 levels by 2030
• China recently announced plan to monitor, report & verify methane emissions, and establish policies, technology and standards
New industry commitments and financial support:• Companies made new commitments, and $1B in new methane abatement funding was announced (see below)
Enhanced international collaboration including key new countries:• 7 countries3 joined Global Methane Pledge taking total to 155 countries committed to 30% methane emissions cuts by 2030
• US and China demonstrated their new cooperation on methane at COP28 Methane Summit, following agreement to cooperate on
technical solutions, policy and capacity building• The COP28 Presidency called for NDCs to include methane targets

BCG@COP28

Key Announcements @ COP28
1 Industry steps up: Launch of Oil

Read BCG's blueprint thatoutlines how to scale new lowcarbon technologies, the global
implications of the shift, andactions for all stakeholders& Gas Decarbonization Charter
30 NOCs and 20 IOCs representing 40%
of oil production committed:• Near zero methane by 2030, vast
majority doing so for the first time
• Eliminate routine flaring by 2030, 35
doing so for the first time
• Net Zero Scope 1/2 emissions by
2050, 36 doing so for the time2

Tracking: Full launch of MARS1
and expansion of SMC
UNEP shared data from MARS pilot,
demonstrating potential of this platform
to revolutionize methane accountability• 1,500 plumes identified in year 1• 127 notified to authorities
OGCI expanded its Satellite Monitoring
Campaign (SMC) to new countries andassets3

Finance Commitments fromcountries and companies
Announcement of ~$1.2B mobilized
for methane action since COP27
from countries and industry
Includes: $255M for launch of WorldBank Global Flaring and Methane
Reduction Partnership (GFMR)

15
Sources: IEA; Environmental Defense Fund; Zero Carbon Analytics; 1. Methane Alert and Response System; 2. Satellite Monitoring Campaign; 3. Including Turkmenistan, Kazakhstan

02

Methane (O&G) | O&G companies must launch robust methane
abatement and make zero methane ops. a competitive advantage
Implications for leaders
Regulatory pressure to accelerate methane abatement especiallyin Global Methane pledge countries, OGDC companies, andcountries with new regulations/fees (e.g., US IRA)
Zero-methane operations is becoming the new license-to-operate
and a source of competitive advantage in many markets
Finance available for eligible methane emitters in developing
countries, e.g., tax credits for low methane emissions gas

Demand to increase for methane emissions detection,measurement, identification and abatement solutions e.g., third
party certification of hydrocarbons' emissions, suppliers with zeromethane equipment and services

Read more about the newparadigm for Oil and Gas
decarbonization, and how toaccelerate abatement in a
cost-effective way

Actions to take
Countries to implement policy and regulation to accelerate methane abatement• Develop robust sector-specific standards and rules• Establish and implement monitoring, reporting and scrutiny• Facilitate access to funds, collaboration (e.g., sharing equipment), transfer oflessons learned and know-how
Oil and Gas producers to put in place a robust methane abatement program at
corporate and asset-level that accelerates no regret actions; e.g.,• Create a reliable baseline and technology strategy• Replace equipment that vents CH4 by design; e.g. high bleed pneumatics• Install equipment that captures gas otherwise vented or flared; e.g. VRUs
• Put in place an advanced "leak detection and repair" program• Launch zero methane ops. program tackling workflows, incentives, culture
Investors and suppliers must adapt framework to methane abatement projects• Adapt expected return to what methane abatement projects can deliver• Work closely with O&G companies to pilot solutions in the field• Build flexible solutions to accommodate fast technology evolution

Read more about
methane's potency
as a greenhouse gas,
and the solutions
readily available

Read more about
the power of cutting
methane emissions
in fighting climatechange16

03

Heavy-Emitting Sectors | Continued progress on existing initiatives
and launch of the Industry Transition Accelerator

Key facts1• Heavy Emitting sectors1 represent~30% global GHG emissions• Emissions projected to grow 32%
by 20503• $15T needed to 2050 todecarbonize3• 50% of abatement to 2050 relies ontechnologies not yet at scale4

Key takeaways from COP28
COP28 saw the expansion of existing initiatives launched since COP26• Breakthrough Agenda to accelerate decarbonization of key sectors. Concrete & Cement Breakthrough initiative launched at COP28• First Movers Coalition(FMC) leverages the collective purchasing power of its members to stimulate demand in 7 high-emitting
sectors FMC added three members, totaling 90+ members, with $15B annual clean demand by 2030
• Green Public Procurement (GPP) Pledge, sets timebound commitments to procure low-emission steel, cement and concrete.
UNIDO IDDI added four new government joiners, published blueprint for accounting standards
Despite progress made and presence of several decarbonization initiatives in previous COPs, further action required acrossdecarbonization of supply, acceleration of green demand and definition of standards for decarbonized products
COP28 Presidency supplemented these initiatives by: I) launching Industrial Transition Accelerator to accelerate HES
decarbonization II) building on green procurement commitments III) supporting launch of low carbon steel standards IV) supporting
UAE in co-launching Cement & Concrete Breakthrough initiative alongside Canada
Heavy emitting sectors were a central part of the Energy and Industry Day at COP28

Key Announcements @ COP28

BCG@COP28

Cornelius Pieper moderating theIndustrial Transition Accelerator
Presidency Roundtable

1

2

3

4

Industrial Transition Accelerator (ITA)• First ever cross-sectoral initiative to enable
policy, financing, tech required to accelerate
decarbonization of heavy emitting sectors• 38 companies committed to net zero targets,
2030 target, decarb plans, emissions disclosure• Endorsed by partners and industry associations
representing ~50% of cement & aluminum,~80% steel, ~40%+ power, ~80%+ air traffic• Led by COP28 Presidency, Bloomberg, UNFCCC

Demand Signaling
Green Public Procurement of
low-carbon cement & steel:
UK, Canada, USA, Germany forthe first time, commit to IDDI's
procurement pledge.
UAE, Japan made statementsof-Intent
First Movers Coalition: CocaCola, Volvo cars, Ball joined

Launch of the SteelStandards
Principles, callingfor common
methodologies formeasuring GHG
emissions the ironand steel sector toaccelerate the nearzero transition

Canada & UAE
launched Cement& Concrete
Breakthroughinitiative to sharepriority actions todrive policy
reforms
to decarb industry

Source: 1. Heavy Emitting Sectors include Cement, Steel, Aluminum, Shipping, Aviation, Land Transport, Chemicals. 2. IEA analysis under Stated Policies Scenario, BCG analysis
3. Mission Possible Partnership 4. 2021 IEA NZE; First Movers Coalition

17

03

Heavy-Emitting Sectors | Decarbonization solutions, green demand,
policy and finance needed to accelerate the transition to net zero
Implications for leaders

Actions to take

Increased cross-sectoral collaboration between heavy
emitting sectors across key enablers, and shift towards
decarbonization solutions and technologies at scale

Heavy Emitting Sector producers must address regulation and market pressure:• Proactively assess implications and define business opportunities stemmingfrom new regulation (e.g., IRA, CBAM)• Work closely with offtakers to finance large scale decarbonization projects

Pressure and proposals for policy and standards for
low-carbon products (e.g., through Breakthrough Agenda)• Join the Industrial Transition Accelerator to collaborate with producers from otherheavy emitting sectors globally, and leverage lessons learned across sectors

Buyers of Heavy Emitting products:

Increased demand for green products fromsignatories to the GPP and FMC
Broader alignment on how to define low carbon products,
e.g. steel, enabling cross-border movement of green
technologies & products, and investments in clean tech

• Take part in innovative business models, including purchasing clubs, such as theFirst Movers Coalition, to create early markets for innovative clean technologies,
supporting securing supply of low-carbon products in the longer term

Governments must deploy policies for supply decarbonization and green demand:• Define policies to incentivize long term investment from producers, buyers andfinanciers in HES supply and demand• Commit to UNIDO IDDI's Public Procurement Pledge to signal commitment to green
procurement to private sector and incentivize long term investment in the country

Read more
accelerating Green
Demand throughGreen Public
Procurement:
Catalyzing the
Net Zero Economy

Read more
accelerating
Green Demandthrough First
Movers' Coalition

Read more about
IDDI's report on
Greenhouse Gas
Accounting System,
supported by BCG

Read more about
BCG's report on
Green Awakening
on Decarbonized
Products

Read more about
CDP and BCG'sreport ontransitioning fromgrey to green in18
hard to abate

04

Food & Agriculture | Governments raise ambition for food systemtransformation, supported by non-state actor action and ~$3B funding

Key facts• Food production contributes to 33%
of greenhouse gas emissions, and a
1C additional warming by 2100
from food systems is expected• 720 million people are today
undernourished; 30% of foodproduction is lost or wasted• Today, climate change has caused a
21% decrease in ag productivity

BCG@COP28

Shalini Unnikrishnan BCG Global Leadfor Sustainable Food, Agriculture &Nature and Co-Chair of the COP28
Action Agenda on Regenerative
Landscapes moderating the launch of
the initiative ambition

Key takeaways from COP28• Building on COP27 Agriculture Day and CDB COP15's focus on sustainable food systems, Food & Agriculture was one of the
COP28 Presidency's priorities and given a prime spot during Day 1 of the World Climate Action Summit• Increased political focus and momentum seen via COP28 UAE Declaration on Sustainable Agriculture, Resilient Food Systems,
and Climate Action, asking governments to commit to embed food and ag targets into climate planning tools• Farmers placed central of the food transformation, with consultations with farmers guiding both public (e.g., Declaration) andprivate sector (e.g., COP28 Action Agenda on Regenerative Landscapes) narratives and action of food systems• Private sector stepped forward to turn commitments to action focusing on projects on the ground, with a call to increase
collaboration across the value chain including businesses, financiers, civil society and local governments• Elevated focus placed on 1) unlocking public and private finance (~$3B mobilized) for food system transformation and 2)
accelerating innovation and research for adaptation & resilience, particularly in the Global SouthKey Announcements @ COP28
1

2

3

4

COP28 UAE Declaration
on Sustainable
Agriculture, Resilient Food
Systems, and Climate
Action: 150+ Heads of Stateendorse, mandating inclusionof food targets into climate
planning1 accompanied by$200M in technical support

COP28 Action Agenda
on Regenerative Landscapes:
25+ leading organizations
accelerate transition to regenag, covering 160M ha2, 3.6M
farmers and $2.2B in future
investment, an initiative cochaired by BCG, WBCSD,
COP28 Presidency & UNHLC

Accelerated innovation (incl.
$200M mobilized): a) new
partnership between UAE
and BMGF3 to identify, fundand scale ag innovation in
selected countries and b)
increased funding to CGIAR4
for adaptation focused ag
R&I5 from the UAE & BMGF

Financing the Future of Food
(F3): Creation of new blended
finance mechanism toaccelerate and de-risk private
sector investment into foodsystems in the Global South($500M bond issuanceannounced supported by theWorld Bank Treasury)

Read the COP28 declaration
1. Nationally Determined Contributions, National Adaptation Plans, National Biodiversity Strategic Action Plans 2. 3x the land area of France 3. Bill & Melinda Gates Foundation; 4. Consultative
Group on International Agricultural Research 5. R&I = Research & Innovation

19

04

Food & Agriculture | Opportune time to tap into government and
MDB focus placed on transforming food systems
Implications for leaders
Greater focus from governments on defining and refining
food in national climate plan, accompanied byincreased funding
Positive nature and people impact from transformed
agricultural practices as we pivot to regenerative ag
at scaleUse case examples and best practices emerging fromsuccessful and scalable regen ag projects across geographiesand crops
Consumer and investor pressure to adopt regen ag
practices and for transparency on corporate action
and impact
Growing financier (incl. MDBs) appetite to invest
in and fund concrete projects, incl. regenerativeag, and research and innovation

Read about what is needed tomake regenerative agriculture
profitable for farmers, coveringboth financial and non-financial
levers. Co-authored by OP2B, BCG
and WBCSD

Actions to take
Governments:• Include food targets in national climate plans and develop a project pipeline ofpolicy, investable / non-bankable projects• Coordinate policy and financing to incentivize the transition
Businesses:• Join the COP28 Action Agenda on Regenerative Landscapes• Develop regen ag strategies, plan and landscape-level projects• Set targets to measure impact incl. Scope 3, implement MRV• Collaborate with value chain adjacent players (incl. farmers)• Simplify understanding and access to 'financing stack' needed by farmers,
particularly smallholders• Explore innovative financing offerings that de-risk investments• Invest in ag innovation start-ups to unlock larger funding pools
Multi-laterals• Support to align policy with needs, increase blended financing

Visit the COP28 Action Agenda on
Regenerative Landscapes website tolearn more about the initiative andview a global mapping of existing andplanned regenerative landscape20
projects

Finance | COP28 delivered $85B of new climate finance and limited
support for a set of principles to unlock much more

05

Key takeaways from COP28

Key facts• Estimated global investment needto transition to the low-carbon
economy ($T p.a.)
2022

1,265

2030 5,905

12,012

X8.5• 70%+ climate finance targets
energy, leaving a shortfall for
sectors like industry ($8.5B vs.
$70B required)• 13x increase needed for EMDEs(excl. China) to reach $2.4T/yr.

BCG@COP28

Wendy Woods and Amine Benayad,
with Stefan Wintels, CEO of KfW,
launched a report on how DFIs canbetter partner with private sector
finance to unlock climate financing• COP28 UAE Declaration on Climate finance, set out guidelines for actors in the finance ecosystem – public & private finance,philanthropy - to drive a sector transformation, and address the climate finance challenge especially for EMDEs• Yet while the declaration's intent was acknowledged by some Heads of State / Government, the limited number of signatories (13)suggests more is required to build traction after COP28 ahead of the 2024 finance forum• The UAE demonstrated its support for the new guidelines through a broad action agenda, including the launch of Altérra, AED 1T
in sustainable finance issuances, global climate finance hub based in the UAE, and the first Business and Philanthropy Climate
Forum• Strong fund mobilization at COP28 (>$85B) including >$30B from MDBs and donors, >$3.5B for the GCF leading to the largest
capitalization ever ($12.8B) drove optimism that climate finance can flow and be fixed. Yet, this is still a fraction of need, even as
questions on how to raise the trillions required remain open

Key Announcements @ COP28
1
COP28 UAE Declaration on
Climate Finance• 10 principles to seize
growth opportunities,
mobilize funds, improvefinance accessibility andaffordability• Report back framework ina Climate Finance Forumin 2024

2
Launch of ALTÉRRA• A $30B innovative
catalytic climate
fund with a risk
mitigation capital• Potential to mobilize
up to $250B indeveloped anddeveloping
countries

Read the COP28 declaration
1. Global Landscape of Climate Finance 2023 – Climate Policy Initiative

3
IFIs/MDBs to rethink financesector• >$14B+ from the World
Bank; 3x climate financefrom IDB; $10B for thePhilippines from ADB• World Bank, IDB, EIB, EBRD,
AfD announced Climate
Resilient Debt Clauses; UAE
contributed $200M SDRs

4
UAE positioned itself as a new
Climate Finance Hub• Global Climate Finance Centre to
support greening fin. markets• Banking sector committed to$270B sustainable financeby 2030• $4.5B Africa Green Investment
Initiative• $500M Climate Tech ecosystem

21

Deepdive

Finance | Launch of ALTÉRRA, an innovative $30B global climate fundwith a risk mitigation capital to mobilize private capital at scale
ALTÉRRAKey facts1• 50% of global climate finance isgenerated by the private sector. The
IMF estimates that climate financemust increase from 40 to 90% of
the total in EMDEs by 2030
• <2% climate finance is generated
by institutional investors andfunds; commercial banks andcorporates dominate private
finance

A $30B innovative catalytic climate fund, is the largest
targeting both developed and developing markets$5B allocated in the initial round of partnerships
5.0

8-9x
1.5

250
2.0

1.5

30
25

5

UAE capital

Potential funds to mobilize

Risk mitigation capital

Commercial

BCG@COP28

First
allocation

Implications• The UAE plays a pivotal role in shaping the new global climate investment ecosystem by collaborating with global sophisticatedGPs, institutional capital, philanthropic organizations, and established multilateral financial institutions
Nili Gilbert, BCG Senior Advisor,
moderated the Financing the New
Climate Economy event which featured
discussions with Larry Fink, James
Coulter, Bruce Flatt, and other key global
asset managers on ALTÉRRA's
innovative approaches to unlock capital
flows at scale• Incentivizing global investors to develop strategies, teams, and capabilities focused on the nexus of climate and Emerging
Markets and Developing Economies• Blueprint designed for global replication and/or scale-up to address the climate finance gap

1. Global Landscape of Climate Finance 2023 – Climate Policy Initiative

22

05

Finance | Urgent imperative for accelerated, scaled-up, andcollaborative actions from Governments, Private Sector, and MDBs
Implications for leaders
Government donors and recipients will be focused on freeing
up fiscal space for development and climate action
Lenders will see Climate Resilience Debt Clauses (CRDC)
becoming standard features in lending agreements
Growing expectation that rich countries and philanthropies
support the climate transition with development assistancefunds
New funding opportunities for Private sector in EMDEs andemerging sectors
Additional MDBs funds for climate become available,
particularly for adaptation and resilience
Green Finance Cluster is emerging in the UAE

Read more about
global best practices
and policies for DFIs to
unlock climate financeActions to take
Governments• Accelerate the roll-out of comprehensive policies and incentives frameworks todrive low-carbon 'transition' ('IRA for every country')• Donor countries need to expedite debt restructuring, by initiating a framework
involving both public and private creditor, broadening the list of beneficiary
countries and timeboxing restructuring discussions• Donor countries need to expand CRDC in future lending agreements• Donor countries need to rethink ODA deployment by identifying areas andmodels where private sector engagement can maximize the impact• Recipient countries need to develop platform sponsored by the highest level ofthe government bringing together private sector and philanthropies
Private sector:• Formulate an approach for the new competitive space in private-led blended
finance, and speed-up innovation of catalytic instruments and partnerships• Consider Nature and Social aspects of Just Transition
MDBs:• Develop platform for innovative catalytic instruments and joint action

Read more about why
investing in adaptation isboth a business imperative
and an economic opportunity

23

06

Nature & Water | Nature and Water were key areas of focus for COP28,
with ~$2.9B in new funding announced

Key facts• Nature-based Solutions (NbS) can
help achieve ~30% of mitigationneeded for 1.5°C by 2050
• Annual NbS funding to meet Rio
targets needs a ~3x increase by2030 ($542B in 2030, vs. $200B in
2022)• By 2050, more than >50% of the
global population will live in areas
suffering from water scarcity

BCG@COP28

Torsten Kurth, Managing Director &Senior Partner, intervening on water
resilience at a COP28 event coorganized with WWF and WFPKey takeaways from COP28• Nature was at the center of the COP28 Presidency's Action Agenda, with initiatives developed across all ecosystems (forests,
oceans, mangroves, freshwater, etc.) and enablers (finance, policy alignment, etc.), and showcased on COP28 Nature Day• Water was confirmed as a key topic for COPs, in the footsteps of COP27's first-ever Water Day, with an array of initiatives andcommitments dedicated to water-resilient food systems, water resilience in urban environments, and water scarcity• COP28 increased momentum on NbS & ecosystem restoration, and created a connection with food systems, with additional
funding unveiled and policy discussions to put in place enablers for NbS

Key Announcements @ COP28
1

2

3

4

At-scale funding mobilized
for nature & water

Enhanced focus on water,
oceans & coastal areas

New enablers for scaling up
nature & climate action• ~$2.9B announced forthe protection &conservation of natureand for water initiatives,incl. $1.1B in innovative
financing packages forforest-rich countries,$1.0B for a NbS Hub in
Asia-Pacific (ADB1), and$200M for water security
and urban water utilities• 37 countries joined theFreshwater Challenge, acountry-led initiative toprotect & restore
freshwater ecosystems

Increased engagement of
the private sector in naturepositive• 2 mangroves protection &restoration initiatives
showed rapid growthsince COP27: Mangrove
Alliance for Climate2,
Mangrove Breakthrough3• 150 businesses andFinancial Institutions
engaged in discussions todevelop nature actionplans, with commitments
to set nature targets(SBTN4, SBTi FLAG5), toinvest in NbS, and to
disclose nature-relatedrisks (TNFD6)• 18 countries affirmed
their commitment tointegrate their nature &climate plans (NDCs,
NAPs, NBSAPs7)
Read the Joint Statement• 15 countries agreed on aroadmap to scale highquality and high-integrity
forest carbon credits
under the FCLP8 initiative

1. Asian Development Bank; 2. 30 countries joined the Mangrove Alliance for Climate, led by the UAE and Indonesia; 3. 21 countries endorsed the Mangrove Breakthrough, led by the Global
Mangrove Alliance; 4. Science Based Targets Network; 5. Science Based Targets initiative for Forest, Land and Agriculture; 6. Taskforce on Nature-related Financial Disclosures; 7. Nationally
Determined Contributions, National Adaptation Plans, National Biodiversity Strategic Action Plans; 8. Forest and Climate Leaders' Partnership

24

07

Health | COP28 created strong momentum, but we need to build on
this to translate it into new commitments and more targeted action
Key takeaways from COP28

Key facts• Climate change threatens progress
in Global Health, specificallyon malnutrition, vector-borne andwater-borne diseases (e.g., malaria,
cholera), and may likely exacerbate
other illness (e.g., heat stress,
respiratory illnesses)• Increasingly frequent and severe
climate-related weather events arealso expected to impact healthsystems through physical damage,supply chain disruption, workforce
disruption and system overload• The health sector is also
responsible for ~5% of global
emissions, driven largely by
manufacturing & transport ofcommercial biopharma players

BCG@COP28
Panel withmembers of
the SMI Health
Systems Task
Force

• COP28 helped build momentum on Climate & Health (C&H) - many actors came together to recognize the importance of C&H
and issue joint calls to action. Key moments included: first ever C&H Ministerial, attended by 110 health ministries, and 144
countries endorsing a Declaration on C&H• Significant funding announcements were made across health¹:• New funding was pledged to health: e.g., $777M pledged to eradicate NTDs at the RLM Forum• Organizations committed to give existing health funding a climate lens: e.g., $500M from Global Fund for Malaria efforts• Funds (new & existing) were committed to C&H initiatives: e.g., $100M from Rockefeller, $12M for Global Grand Challenges• Funding announcements were accompanied by commitments to new mechanisms & programmes, and funding principles. 41
organizations endorsed Guiding Principles for Financing Climate & Health solutions to protect health. The Green Climate Fund,
UNDP & WHO partnered to develop a C&H co-investment facility to support 14 developing countries by deploying $122M• Global agenda-setting will be needed to ensure action on climate & health is focused on high-impact areas. The nexus of Climate& health is broad (varied topics across the 150 events at COP28 reflected this). Ecosystem currently lacks clear priorities androadmap, risking fragmentation. To ensure focus is on funding and action, we need to build greater coordination and consensus

Key Announcements @ COP28
1

2

3

4

144 countries signed
the C&H Declaration,
which seeks toincorporate healthconsiderations in thecontext of the relevant
Paris Agreement &UNFCCC processes

Health was launchedas part of the Sharmel-Sheikh Adaptation
Agenda, with 4
Outcomes by 2030
(health services, heat,
Early Warning
Systems & finance)

41 organizations
endorsed Guiding
Principles for Financing
Climate & Healthsolutions, recognizingneed for financing toprevent and protect
against health risks ofclimate change

World Bank announced
a new program toincrease evidence on
C&H and invest in
country-specificsolutions, and the coconvening of a working
group of Development
Banks for C&H Finance5

SMI announced
development of new
green power sourcing
deal in India & China
and collaboration ona framework tomeasureenvironmental
impact of medicines
Read the COP28 declaration25
1. The COP28 Press Release references $1B of climate & health funding, including both existing funds and incremental / new funding; Sources: COP28 Website, Reuters, WHO, BCG Analysis

08

Adaptation and Resilience (A&R) | Urgency to act on A&R clear; public& private sector momentum building but funding gaps remain

Key facts• 85% of countries have adaptation
policies, laws, strategies, or plans• 25% of businesses that disclose to
CDP are recognizing material
financial exposure to physicalclimate risks• $215-387B annual A&R needs indeveloping countries by 2030; yet
only $63B mobilized in 2021/22• 10% of public climate financedirected to A&R – significantly fallingshort of Paris Agreement

BCG@COP28

USAID-led PREPARE Call to Action
launch event at the US Center,
moderated by Qahir Dhanani with
Secretary John Kerry and
Administrator Samantha PowerKey takeaways from COP28• There was sustained momentum on A&R from COP27, with action-oriented discussions held with key state and non-state actors.
Public-private collaboration was a central theme; inclusivity and locally-led adaptation noted as critical in planning andimplementing A&R• The Global Goal on Adaptation1 was adopted as a framework to measure & track adaptation, with resilience objectives per sector,
urging countries by 2030 to develop national adaptation plans, including impact, vulnerability and risk assessments, and toprogress implementation. Calls for doubling of adaptation funding from developed to developing countries, and seeks to close
finance gap, though without a clear pathway.
• A large financing gap remains but new financial commitments were made including World Bank climate finance increase by 45%($9B to 2025) with half for A&R2 . A&R also benefits from GCF $3.5B pledge and other MDB commitments to climate action• Private sector is stepping up involvement in A&R. US Gov's PREPARE Call to Action driving major companies to commit to A&R
and invest in innovation & protection. Private finance (incl. 400+ asset managers through IGGCC) issued a call to action• Some important sector-specific achievements, including the Food Declaration (134+ countries signed) to include food and land
use in NAPs by 2025, and the Climate and Health Declaration (123+ countries) to accelerate climate-resilient health systems

Key Announcements @ COP28
1

2

3

4

74 countries signed the
COP28 declaration on
climate, relief, recovery, andpeace that aims to enhance
A&R efforts and funding
access, improve knowledge,
and promote collaboration
for conflict-afflicted areas

Financial architecture reform,
incl. new MDB
commitments1 on A&R
finance and climate-resilientdebt clauses, use of IMF
Special Drawing Rights, andJoint MDB Long-Term
Strategies & harmonizing
A&R finance approaches

Climate Resilience
Investment in Solutions
Principles Framework
launched to support
investment managers bysetting A&R technologies,
products, and services as athematic growth market

USAID-Led PREPARE Call to
Action launched to mobilize
private sector action on A&R
across protection,
participation in public sector
implementation and growthof the market. 31 major
corporations have madecommitments

Read the COP28 declaration

1. Replaces Sharm Adaptation Agenda. 2. World Bank announced to increase climate finance by 45% (translating to $9bn addl. climate finance per year to 2025), with balanced allocation between
mitigation and adaptation. 3. IDB aiming to triple climate lending to $150bn. Adaptation Fund gained $188m new pledges, though this is short of its $300m target.

26

09

Voluntary Carbon Markets | Collaboration on standards pave theway to a more rigorous, transparent market
Key takeaways from COP28

Key facts• High-integrity carbon credits canplay a supplementary role inhelping companies deliver theirclimate ambition, on top of directemission reductions, while also
facilitating climate finance forcountries and climate projects• Article 6 of the Paris Agreement
provides framework for countries toinvest in projects abroad to counttowards their own NDC (e.g. recent
Ghana-Switzerland transfer)

BCG insights
The voluntarycarbon market isthriving
Climate needs
and market
demand drive
future fordurable CDR• The VCM has evolved significantly, with growing standardization, more rigorous verification processes, and growing participation.
The role of technology in tracking and verifying emissions reductions is also increasing• However, there is increasing concern that there is not sufficient standardization, integrity and transparency to ensure that projects
truly achieve the emissions reductions they claim; conversations at COP28 focused on addressing these challenges• In the negotiations, no agreement on the operationalization on Article 6.4 of the Paris Agreement came to fruition, further
delaying trading under the mechanism. Once established, Article 6.4 will enable countries and the private sector to trade
UNFCCC-approved credits. Pilots under Article 6.2, which creates framework for bilateral trade of credits between countries, areexpected to continue despite lack of agreement on rules related to UN oversight of trade and host country authorization• Still, there was progress and cooperation between major standard bodies outside of the negotiations, which supports many of thestandardization challenges being faced, as well as innovation on types of credits – see announcements below

Key Announcements @ COP28
1

2

3

4

5

End-to-End Integrity
Framework by
GHGP, SBTi, CDP, VCMI,
IC-VCM, and the We
Mean BusinessCoalition underscores
use of high-quality
carbon credits as
supplemental to own
emissions reductions1

Collaboration between
major VCM standards-ACR, ART, Climate
Action Reserve, Global
Carbon Council, Gold
Standard and Verra--toalign on common
principles forquantification andaccounting

Launch of Energy
Transition Accelerator
Led by US State Dept,
Bezos Earth Fund, andRockefeller Foundation:
innovative carbon
finance platform tocatalyze private capital to
speed the just energy
transition in emerging
and developing countries

Launch of coal toclean credit initiative(CCCI) for early
retirement of coalplantsDriven by aconsortium led byRockefeller
Foundation; scheme
will launch throughpilot in Philippines

Guidance for national
regulators on VCMs
from the International
Organization of
Securities
Commissions (IOSCO),
outlining 21 goodpractices to improve
integrity, transparency,
and enforcement27
1. Greenhouse Gas Protocol, Science-based Targets Initiative, Carbon Disclosures Project (now CDP), Voluntary Carbon Markets Integrity Initiative, and Integrity Council for Voluntary Carbon Markets
Sources: COP28 Website, ICVCM, Reuters, Rockefeller Foundation, Verra, IOSCO BCG Analysis

10Hydrogen | International cooperation and new standards to unlock
international hydrogen trade

Key facts• Scaling H2 production and shift to
low-carbon H2 plays a pivotal rolein Net Zero scenarios• However, low-carbon H2 was <1%
production in 2022, with 900M
tCO2 produced by H2 industry• By 2030, average emissions
intensity of H2 must fall from 1213.6 to 6.7-7.6 kg CO2/kg H2e• In addition, over 20%hydrogen/derivates forecast to beinternationally traded by 2030

BCG Insights

Read BCG's perspective on thechallenges and solutions to unlocking
cross-border Hydrogen trade

Key takeaways from COP28
Unlocking global low-carbon hydrogen trade is an important element of enabling the necessary demand growth for Hydrogen toreach 2030 targets forecast as necessary to keep 1.5C within reach. However, trade is currently limited as countries are developing
their low-carbon hydrogen certification schemes in siloes and are not using common standards.
COP28's Hydrogen outcomes focused on overcoming these barriers to hydrogen trade and unlocking the global market, throughdevelopment of universal standards for measuring emission intensity of hydrogen, and international recognition of low-emissionhydrogen certification schemes
This came alongside other significant and relevant COP28 Action Agenda/other initiatives from countries and organizations toaccelerate development of hydrogen technologies and roll-out of low-carbon hydrogen infrastructure• COP28's Global Targets on tripling renewables capacity by 2030 have significance for scaling the hydrogen market: P2X is an
important element of managing renewables intermittency in energy systems

Key Announcements @ COP28

1

2

3

4

Standards: Launch of
ISO/TS 19870 for GHG
emissions assessment ofHydrogen
New standard allows
assessment of GHG
emissions of hydrogenacross the whole lifecycle,
up to the point ofconsumption

Certification: 37 countries
signed COP28's Declarationof Intent, committing to work
together to develop mutual
recognition of theircertification schemes
Countries will work together
to ensure their certification
schemes are not developed insiloes and are interoperable

Trade corridors: Launch of
the Public Private Action
Statement
Countries and companies
agreed to a complementary
set of priorities for the public
and the private sector to
unlock cross-border trade

Projects: $240M funding
from Breakthrough Energy
Catalyst for projects
accelerating tech adoption
at commercial scale
Includes for key hydrogentechnologies, e.g.,
FlagshipONE (Ørsted) –largest e-Methanol plant inEuropeSource: IEA

Read the COP28 declaration

28

THANKYOU
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