The election of President Trump and the establishment of an administration closely tied to the fossil fuel industry is, without doubt, a major setback for global efforts to combat climate change. This, combined with potential Oval Office scepticism toward global cooperation, and you might conclude the prospects for effective international climate action become increasing precarious. However, while the situation currently feels bleak there are plenty of reasons to remain positive.

The worldwide transition to renewable energy is now unstoppable. Renewables are cheap and available everywhere and that is they are considered a major contributor to national security. Delaying the transition to clean solutions, will mean losing competitiveness vis a vis countries like China that will reap the benefits of their leadership in the development of clean energy supply chains (from extraction of critical materials and manufacturing, to combining clean solutions like renewables, electric vehicles and battery storage).

Companies invest in countries that offer long-term policy that is consistent. Even under the shadow of changing US policies, forecasts indicate that the market for core clean technologies like solar panels, wind energy, electric vehicles, and advanced energy storage will triple in value by 2035, matching the current scale of the crude oil market.

This enduring commitment from major economies and corporations to invest in energy resilience is not merely a matter of environmental idealism. It is a financial necessity, driven by the recognition that extreme events poses critical risks to global supply chains, business operations, and economic stability.

Climate change is no longer a distant threat; it is a current reality. Searing heatwaves swept across the Middle East and South Asia this summer, placing millions at risk amid record-breaking temperatures and humidity. More recently, unprecedented floods submerged Valencia in Spain causing devastation, and Hurricanes Milton and Helena ploughed through the US causing more than $50bn in damage. There is a huge cost to the economy that will only grow if we do not reverse global warming.

These catastrophic events serve as a sobering reminder of the urgent need for comprehensive climate action. Scientists have confirmed that global warming has now briefly exceeded the critical 1.5°C threshold above pre-industrial levels—a moment that should galvanize global efforts. Beyond human and environmental costs, these phenomena translate into material business risks. Increasing insurance premiums, disruptions in global supply chains, and physical damage to infrastructure are challenges that transcend political changes.

Businesses cannot afford to ignore these risks. American companies, for example, are already feeling the pressure. Last year alone, 2.5 million people in the United States were displaced by climate-driven disasters, and polling shows that a substantial majority of Americans – 74% – believe companies must limit their environmental impact. Companies that proactively mitigate climate risks and embrace sustainable practices are more likely to build trust with investors, strengthen consumer loyalty, and attract top-tier talent.

COP29 opened this week in Baku, Azerbaijan and represents a critical opportunity to advance climate diplomacy at a time when global collaboration is more necessary than ever. The commitments made last year at COP28 were significant, including a historic commitment to a clean energy future, but they must now be turned into concrete actions. The stakes are clear: without decisive, coordinated efforts, climate finance and policy frameworks will fall short of the $8 trillion in annual investment required to meet the Paris Agreement targets, according to the UN Emissions Gap Report. Recent IEA data shows $1.7 trillion was invested in clean energy in 2023, and while this highlights progress, it falls far short from what is needed to address the scale of the challenge.

Ambition becomes action when backed with money. To drive the energy transition, COP29 must produce a groundbreaking financial framework. Negotiators need to agree a new collective quantified goal for climate finance to mobilise significant private investment, particularly in low- and middle-income countries. Ambitious financial commitments have already shown their potential; the US Inflation Reduction Act, for instance, catalysed more than $400 billion in private clean energy investments. However, a coordinated international effort is required to help build trust between countries and provide developing nations with the confidence that scaled-up finance will be available to implement their new climate plans.Businesses are not waiting for governments to act. The private sector has demonstrated its ability to lead by setting science-based targets and investing heavily in clean energy. Yet, to achieve lasting impact, companies need policy certainty. Robust, predictable regulations are essential to provide the economic stability required for scaling up clean energy investments.

Moreover, the transition to a low-carbon economy must be equitable. Policies must prioritise adaptation and resilience, especially for small and medium-sized enterprises (SMEs) that are pivotal to global supply chains but often lack the resources for large-scale green investments. Climate finance must be inclusive and transformative, ensuring that the shift to clean energy benefits the most vulnerable communities.

Despite the immense challenges, human ingenuity has consistently risen to meet global threats, and the climate crisis should be no exception.