Empty Link Skip to Content

Assessing the Impact: Key Commitments and Developments from COP28

Services: ESG Date: 22/01/2024


Recent reports have confirmed that 2023 was the hottest year on record adding greater urgency and importance to the conclusion of international climate change negotiations at COP28 – the United Nations Framework Convention on Climate Change conference - in Dubai on 13 December 2023.  Here, we describe the main commitments and developments from COP28, as well as the key themes of the event which we have seen emerge over recent years including the effect on relevant initiatives at EU and domestic policy level. 

The Loss and Damage Fund

"Loss and damage", whilst not formally defined by the UN, is described in Article 8 of the Paris Agreement 2015 and is generally understood to encapsulate climate change impacts which cannot be addressed by mitigation or adaptation efforts. Loss and damage discussions at COP28 prioritised establishing and outlining a loss and damage fund; the framework for which was agreed on the first day of COP28.  Going forward, this will mean that the EU and its member states must work alongside vulnerable countries to develop and materialise this framework. The Paris Agreement 2015 recognises the importance of averting, minimising and addressing loss and damage as a result of climate change. The purpose of the loss and damage fund will be to aid developing countries that are especially vulnerable to the adverse effects of climate change to respond to loss and damage suffered as a result of extreme weather, sea level rise, climate migration, and other climatic events. Countries had pledged over USD 700 million of capital towards the fund by the end of COP28, which is significant in relation to commitments made in the Paris Agreement of 2015.  The World Bank will host the loss and damage fund in the interim over the next four years.  

The Global Stocktake 

COP28 hosted the first global stocktake ("GST") which was planned to take place in 2023 under Article 14.2 of the Paris Agreement 2015 with Article 14 of that agreement describing generally the purpose of the global stocktake.  Countries assessed what progress they have made so far in meeting the goals of the Paris Agreement so that this can inform further steps they will need to take in the next round of Nationally Determined Contributions ("NDCs") that will need to be submitted in 2025 before COP30 starts.  The GST which took place at COP28 called for a "systems transformation" following what was described as a "whole society" and "whole economy" approach reflective of concepts already addressed in the United Nations Sustainable Development Goals including sustainable development generally accompanied by the eradication of poverty.  Specifically, there was a call on parties to contribute to transitioning away from fossil fuels in energy systems with a view to achieving net zero emissions by 2050.  Nations such as the United Arab Emirates are dependent on the continued use of fossil fuels and have been slow in the past to implement climate policies.  All countries need to be involved if the transition to clean energy is going to be effective.  In Ireland, emissions have dropped by 1.9% since 2021, which was driven by reductions in the residential sector, industry, agriculture and electricity generation.  The overall emissions reduction, while welcome, falls short of reductions required to achieve national and EU targets.

Alternative Energy 

The Paris Agreement's overarching goal is to hold the increase in the global average temperature to well below 2C above preindustrial levels and pursue efforts to limit the temperature increase to 1.5C above pre-industrial levels.  The COP28 Global Renewables and Energy Efficiency Pledge was made in Dubai to support this direction, and bring greenhouse gas emissions in 2030 to levels consistent with 2C and 1.5C pathways. 

Countries declared their intent to work collaboratively and expeditiously to pursue three objectives:

  • working together to triple the world's installed renewable energy generation capacity to at least 11,000 GW by 2030, taking into consideration different starting points and national circumstances;
  • working together in order to collectively double the global average annual rate of energy efficiency improvements from 2% to over 4% every year until 2030; and
  • putting the principle of energy efficiency as the "first fuel" at the core of policymaking, planning, and major investment decisions.

In this context there have been important policy developments in Ireland, including initiatives in relation to the development of offshore wind projects with the ORESS-2 Consultation and developments in relation to hydrogen, supporting the goal of the Irish Government to invest in renewable energy transition infrastructure both offshore and onshore. 

Representation of the EU at COP28

The EU and its 27 member states attended the COP28 with both the EU and member states being represented as separate entities.  The EU regards itself as a global leader in tackling climate change and the European Council has described an overall goal of making the EU climate neutral by 2025.  There are many actions which will go towards achieving this goal, but some of the more specific actions are already affecting businesses in Ireland and Europe and therefore of immediate interest.  We have described how the Energy Performance of Buildings Directive proposes to have all buildings to be zero-emission buildings by 2050 (read our Insight here).  This will have a significant impact on the construction industry in Ireland and will also have an effect on the existing constructed stock, in the first instance in relation to commercial real estate but also in relation to residential buildings.  In our Insight on Stranded Assets in the Real Estate Market, we have described how properties will be exposed to the risk of early desuetude because they will not meet future regulatory efficiency standards or market expectations driven by concern with climate change and other environmental matters.  The speed at which assets risk becoming stranded will increase with the human impacts of climate change and respective regulations.  There will be a challenging transition phase, but it is worth mentioning that within the Global Renewables and Energy Efficiency Pledge it is noted that the productive reconversion of stranded assets will be promoted.  


A second specific example of an EU initiative with far-reaching impact is the Corporate Sustainability Reporting Directive ("CSRD") which will, in time, be further augmented by the Corporate Sustainability Due Diligence Directive ("CS3D"). The CSRD brings new standards of accountability to sustainability reporting, with firms being expected to report on how sustainability issues affect their business in terms of costs, risk or growth and what impact a business has on people and the environment.  It will be followed by the CS3D which imposes due diligence obligations on management of companies in scope.   For more on the recent developments regarding these initiatives, read CSRD: Proposed Deadline Extensions Explained and our Insight, EU ESG Regulations in the Spotlight, which looks at the next stage of CS3D.


Key developments from COP28 are the emergence of sustained discussion around the loss and damage fund, as well as further emphasis and development around the concept of the global stocktake which emphasises the importance of a global transition into clean energy whilst taking a whole society and whole economy approach to the overarching need to tackle climate change.  These global initiatives are reflected in specific European initiatives underlying the importance of the EU as a global leader.  Two examples mentioned here are the EU initiatives in relation to carbon emissions and buildings, with specific measures regarding the productive reconversion of stranded assets, and EU sustainability initiatives such as the CSRD and CS3D.  Domestically, developments in relation to alternative energy are significant.  We continue to monitor these particular developments and will keep our clients informed through events and relevant insight pieces.

Get In Touch

If you would like more information on this or other ESG matters, please get in touch with the ESG Advisory Group or with your usual Matheson contact.


Explore cross-sectoral legal insights, thought leadership and latest updates from our ESG Advisory Group

Find out more Find out more
esg banner skyscraper