Old Mutual : Climate Report 2023

Our Integrated Report provides a balanced view of our value creation story. It shares our strategic journey to becoming our customers' first choice to sustain, grow and protect their prosperity. Although primarily aimed at our providers of capital, it will be of interest to all stakeholders invested in understanding our unique value creation story.

Our Corporate Governance Report provides an overview of Old Mutual's approach to corporate governance. The report focuses on how we do business in accordance with sound governance practices, which are informed by the highest ethical standards, integrity, transparency and accountability. The report will be of interest to investors, regulators and analysts.

Our Remuneration Report provides insight into how we address remuneration-related activities and disclosures and reflects how our rewards purposefully align performance outcomes with shareholder interests, while balancing our need to be an attractive employer. The report is of interest to investors, employees, regulators and analysts.

Our Sustainability Report reflects on our sustainability journey, sharing insights into how we manage our most significant environmental, social and governance (ESG) risks and opportunities. The report will be of interest to investors, analysts and a wide range of stakeholders.

Our Climate Report contains information about the Group's climate-related activities, policies, governance, strategy, risk management, metrics and targets. The report provides information that enables stakeholders to assess our progress in our climate adaptation journey. The report will be of interest to all our stakeholders.

Our Tax Transparency Report concisely outlines our tax philosophy, communicates how the tax strategy is interconnected to the Group strategy and demonstrates our commitment to being a responsible taxpayer.

The report is of interest to regulators, investors and analysts.

Our Annual Financial Statements contain information relating to the Group's financial position and performance. The consolidated and separate financial statements were audited in terms of the Companies Act, 71 of 2008 (as amended) (Companies Act). The report is of interest to investors, analysts, regulators and other stakeholders.

Approval

The Board acknowledges its responsibility for ensuring the integrity of this Climate Report. This report was approved by the Board for release on 27 March 2024.

Scope and boundary

Our design theme for the 2023 annual reporting suite is centred around movement and progression in modern Africa, with our insights depicted as a guiding light for our customers in uncertain times. Our imagery alludes to the embodiment of development, speed and success in embracing technological advancements while maintaining a human touch when creating, executing and delivering growth across all our operating regions.

This report covers the climate change activities of the Group for the period 1 January 2023 to 31 December 2023. It provides an overview of key environmental initiatives related to climate change risks during the period.

Guiding frameworks

The report's content is guided by the Task Force on Climate-related Financial Disclosures (TCFD) framework.

Assurance

More information available online

Management reviewed the reporting content to ensure accuracy and the Board and Responsible Business committee provided oversight. Group internal audit followed a limited assurance process regarding numeric disclosures.

Information within this document

Other reports within the reporting suite

1

Understanding our Climate Report

Our report follows the recommended disclosures of the four pillars of the TCFD framework.

Background

We provide our leadership's response to climate change and contextualise our approach.

We outline the global climate context, the scientific basis on which we base the organisation's investment and underwriting decisions, and the responses to climate change of the regions in which we operate.

We outline Old Mutual's response to the climate crisis and summarise our Climate Change Positioning Statement, published in March 2022.

Governance

We show how we govern climate change and how climate change is incorporated into Board committee mandates, investment and subsidiary governance structures.

We also outline how governance is operationalised in the Group and management.

Refer to pages 15 to 17 for more

information

In this section we deal with our businesses investment activities where we invest on our own behalf as shareholder or on behalf of policyholders, through mandates with our asset managers.

Asset owner

We show how our asset owners' and asset managers' governance structures incorporate climate risks into their investment decision-making processes.

Refer to pages 18 to 19 for more

information

Risk management

We outline the Group's processes for identifying, assessing and managing climate change risks, and how these risks are integrated into our Group risk management framework.

Refer to pages 20 to 21 for more

information

We outline our process for identifying, assessing and monitoring climate change as an investment risk, including identifying carbon metrics to aid understanding of our portfolio's carbon profile. We further outline our engagement with our appointed asset managers in South Africa and Africa.

Refer to pages 22 to 25 for more

information

We set out the climate-related risks we identified as part of the risk management process and show how we use the TCFD conceptual framework to assess the impact of these risks on our business.

Refer to pages 26 to 34 for more

information

We provide an overview of scenario planning and modelling for climate resilience in our South African life and short-term insurance businesses.

Refer to pages 32 to 33 for more

information

We share our climate related opportunities.

Refer to page 34 for more information

We highlight our commitments to net zero, engagement and the Just Transition to a green economy, including our commitments to reduce GHG emissions across our investment portfolios.

Refer to pages 35 to 39 for more

information.

We further highlight how climate-related risks and opportunities are factored into relevant investment strategies, our approach at an asset class level and our engagement activity with investee companies.

Refer to pages 40 to 49 for more

information

Metrics and targets

This section details our Scope 1, Scope 2 and relevant Scope 3 greenhouse gas (GHG) emissions as disclosed to the CDP, excluding our asset owner GHG metrics.

Refer to pages 50 to 56 for more

information

In this section, we show the outcomes of the metrics identified as part of our risk management process at an asset class level.

We disclose our Scope 3 Category 15 financed emissions as well as how we are progressing against our engagement targets.

Refer to pages 57 to 66 for more

information

Progress update and the way forward

We summarise our progress against all our commitments over the past few years in line with the TCFD pillars. We also outline our strategic focus areas for climate-related work during 2024 for each pillar.

Please refer to pages 67 to 72 for more information

CONTENTS

4 Background

5 6

7 8 9

A message from our Chief Executive Officer A message from our Chief Risk Officer Overview of our business

The core of who we are

Climate context - the journey to net zero

14 Old Mutual Climate Change Positioning Statement

15 Group governance

• 16 Group governance structures

• 17 Climate Change Task Force

• 18 Asset owner responsible investment governance structures

• 19 Subsidiary governance structures

20 Group risk management

21 Applying our risk management framework to climate change risk

22 Asset owner risk management

• 23 Identifying climate change as an investment risk

• 24 Assessing climate-related risks

• 25 Monitoring assessed climate risks

• 25 Aligning risk management with investment strategy

26 Group strategy

27

Scoring and disclosure of climate-related risks andopportunities

• 28 Group physical risks

• 29 Group transition risks

• 30 Scenario planning for climate resilience

• 31 Old Mutual Life Assurance Company (South Africa) Limited scenario analysis

• 32 Old Mutual Insure scenario analysis

• 33 Old Mutual Insure climate change modelling

• 34 Opportunities

35 Asset owner and asset manager strategy

• 36 Our commitments and progress

• 37 Our commitment to net zero

• 38 Our commitment to engagement

• 39 Our commitment to no new greenfield thermal coal

• 39 Our commitment to a Just Transition to a green economy

• 40 Our Group climate change investment objectives

• 41 Climate change risk integrated into investment decision making

• 42 Integrating climate change objectives into investment portfolios

• 45 Climate change products and case studies

• 46 Renewable energy in our fixed income holdings

• 47 Old Mutual Africa Regions: asset manager initiatives

• 49 Old Mutual Africa Regions case studies

50 Group metrics and targets

• 51 Group GHG emissions

• 54 Group carbon emission reduction initiatives

• 56 Investment property case study

57 Asset owner and asset manager metrics and targets

• 58 Climate change metrics for asset owner proprietary investment portfolios

• 58 Carbon metrics

• 62 Implied temperature rise

• 63 Exposure to thermal coal and green revenue

• 64 Transition risks metrics

• 65 Old Mutual Alternative Investments

• 66 Engagement targets

67 Progress update and way forward

68

Progress update

72 The way forward for 2024

73 Additional information

74

References

• 75 Glossary of terms

76

List of acronyms

Continuous improvement in reporting

We have implemented changes to improve the presentation of this report. We are continually improving and refining our non-financial data collation processes and definitions used when reporting. This may result in re-presentation of prior year data for increased comparability. This will enhance the completeness and accuracy of reporting our non-financial data over time.

In this section

A message from our Chief Executive Officer

A message from our Chief Risk Officer Overview of our business

The core of who we are

Climate context - the journey to net zero

Old Mutual Climate Change Positioning Statement

5

6

7

8

9

14

A message from our Chief Executive Officer

Climate change poses an existential risk to businesses, communities and nations but I believe that it is still possible to manage the risk if we take urgent collective action. The positive developments from COP28 offer hope for a unified and more equitable approach but decisive and sustained action must follow.

Within Old Mutual, we have placed strong emphasis on asset ownership for climate sustainability in 2023, positioning ourselves as industry leaders in responsible investment. To achieve our Net Zero

A track record of delivery

Asset Owner Alliance (NZAOA) 2025 intermediate targets, we aim to transition one third of our global listed equity assets under management (AUM) in our portfolios each year to net zero aligned benchmarks until 2025. We transferred the first tranche to the MSCI World Climate Paris Aligned Index in November 2023.

In November 2022, Old Mutual Investment Group launched the Old Mutual Global ESG Active Fund, which targets listed global companies with high governance ratings and low carbon emissions.

More recently, we signed the Nairobi Declaration on Sustainable Insurance (NDSI), which further cements our commitment to progressing the sustainability agenda. The NDSI commits member organisations to take action on some of humanity's biggest challenges, including climate change, biodiversity loss, extreme hunger, human rights violations, poverty and social inequality.

Active ownership is critical to drive change that enhances long-term collective value. We continue to advance our stewardship capabilities in listed equity and have deepened our active stewardship into fixed income and unlisted alternative assets. Our track record in engaging with clients to incorporate ESG considerations into their investment decisions stands strong, and we are resolute in taking a firm stance while working closely with businesses to support their transition.

We have made noteworthy progress in enhancing our weather and climate risk models within our short-term insurance business. This data is critical in enhancing our risk management and pricing capabilities, and in working with our customers to reduce their risk profile.

Our risk management frameworks also provide a clear basis for our approach to the impact of climate change on our stakeholders morebroadly. As we are located in areas where disaster risk reduction is paramount, we are progressing on modelling for natural perils. This work directs our focus on interventions that serve to mitigate and manage disasters.

We are also active in industry and public sector partnerships to enhance risk mitigation and resilience measures. This includes providing input into climate change planning efforts such as the Presidential Climate Finance Task Team Just Energy Transition Investment Plan (JET IP).

Beyond the physical risks of climate change, we are particularly mindful of the real impact on the lives and livelihoods of the people of Africa - and the need to continue addressing pressing systemic socio-economic issues. That is why we consider - alongside urgent climate action - opportunities across the continent that reinforce the feedback loop of decarbonisation with growth that prioritises low emission.

While climate change is a critical challenge to Old Mutual and the global community, it presents an opportunity to reframe the intrinsic relations that underpin progress. It requires that we find new approaches to reduce our collective environmental impact while building a more equitable world, ensuring that current progress does not jeopardise a better future for generations to come. Indeed, it is our duty as a generational investor to work in concert with all stakeholders to achieve this.

Iain Williamson

Chief Executive Officer

Final CDP report submitted by Old

Launched South Africa's First

Mutual plc

ESG Equity Fund Launched South African low carbon fund Climate Change Task Force established

Submitted our first CDP response as Old Mutual Limited for 2019

Achieved a B score in 2020 on CDP

First Water Disclosure Project disclosure (B score) Expressed public support for the TCFD and first report published in 2022

Finalised coal investment position, later published in 2022

Joined the NZAOA and Net Zero Asset Managers

Initiative (NZAMI)

Won the Asset Owner of the Year category at the Africa Impact Investment Awards

Old Mutual joined the NZAOA's steering group

Maintained B score for CDP 2021 Launched the global ESG Paris-aligned fund called the

Global ESG Active Fund

Recognition in 2022: The CFI.co Best ESG Responsible Investor Africa, the European Banker Best Responsible Investor Africa, and local 27four award for sustainability Developed an Asset Owner Responsible Investment Policy

Maintained B score for CDP and Water Disclosure Project for 2022

Old Mutual Insure launched a Renewable Energy product

Old Mutual Investment Group published its first NZAMI targets

Old Mutual Investment Group awarded Best Sustainable African Investment

Manager 2023 The European Global Business Awards

Signatory to the NDSI

Submitted our first report to NZAOA and established targets

A message from our Chief Risk Officer

Our third Climate Report coincides with the world recording its hottest year ever in 2023.

This is a stark indicator that the window to reduce carbon emissions to levels needed to achieve the 1.5°C path has almost closed. The Intergovernmental Panel on Climate Change (IPCC) concluded that the most likely emission scenario will lead to temperatures that are 2.7°C higher than pre-industrial levels. Few people understand the implications of this level of global warming. A phrase that better conveys the impacts is global 'weirding' - weather patterns that behave in ways not seen before, both in intensity and frequency of severe events, with the world becoming far less hospitable for humankind and all living things.

The science of climate change is clear and unambiguous, and there is growing global consensus on pathways to reduce emissions, as seen in the progress made during COP28. However, hurdles to urgent and collective action remain, and the global community needs stronger trust and collaboration in overcoming them.

Alongside the escalating physical risks of climate change, socio-economic factors are aggravating the challenge of dealing with the crisis. Long-standing issues facing many nations, such as extreme hunger and poverty, social inequality in access to education and health care, and equitable funding to support a Just Transition, are creating fault lines in the geo-political environment. This is leading to conflicts, widening ideological divides and polarisation. These conditions do not lend themselves to addressing the major impacts of climate change, physical and economic losses, displaced communities, loss of life and irreversible damage to an already strained natural environment.

In South Africa, planning for a national response to the climate emergency has been encouraging. However, the pace of execution is far too slow and vested interests frequently hinder meaningful progress. We face a real risk of not being ready for a big tipping point in the near future where the demand for any products or services that are not climate-friendly dries up. In South Africa, in Africa and other parts of the world, our current path will likely lead to a disorderly transition that will demand drastic changes to be made quickly.

Over our 178-year history, Old Mutual has weathered great change and challenge. However, in my opinion, we are facing the greatest challenge of our time. With the sustainability of the planet at stake, we believe that climate change deserves the highest priority in our collective efforts.

Investing for a sustainable future

Old Mutual takes an active approach to addressing climate change and sustainability more broadly. We have a long track record of using skills from our core business in initiatives that will positively impact our communities.

We recognise our responsibility to understand and manage our full carbon footprint. Principally, we drive climate action through responsible investment - in the way we invest the savings and wealth entrusted to us by our customers and our proprietary capital. Although we are decarbonising our direct operational environmental footprint, this is significantly smaller than the indirect impact of our investment activities.

Combating climate change through responsible investing has two main levers - aligning investments to our net zero commitment as part of the UN-convened NZAOA and investing in renewable energy and infrastructure that enhances climate resilience.

To achieve the first objective, we engage constructively with companies to drive climate action against measurable and progressive targets. Transitioning South African industries is critical, considering South Africa's position as a high carbon emitter per capita. Without this transition, we will be increasingly excluded from the global economy. Prolonging the use of legacy energy systems is counterproductive and will ultimately come at too high a cost - financially and in delaying the opportunity of transitioning to renewable energy. For this reason, we support and encourage the private sector's role in rapidly implementing the South African JET IP. We maintain a hard exclusion on new thermal coal production facilities and new coal-fired power plants.

Our largest asset manager, Old Mutual Investment Group, is developing an optimal decarbonisation approach across our global offering. In South Africa, we are advocating with like-minded stakeholders to develop local benchmarks that consider climate change and the Just Transition. Currently, these are not available in the equities market.

Our commitment to drive positive change, rather than uncritical disinvestment, makes our pledge to align our global investment portfolio to the benchmarks set in the Paris Convention more impactful. Our local investments are more challenging as South Africa's large industries have, as a whole, not transitioned to environmental practices that allow any institution to compile a portfolio that meets our environmental ambitions. To overcome this hurdle, we are proactive in investing in net zero leaders. We drive change through our stewardship approach, characterised by assertive advocacy for higher sustainability and environmental standards in all our portfolio companies.

Ensuring insurability

Our economy's sustainability relies on businesses and households continuing to be insured against risks they cannot control. This demands that we understand how climate impacts those risks through extensive data and modelling. As climate change is a relatively new and unknown phenomenon, it is not easy to understand and anticipate how risks will change. Where insurers and their reinsurance partners could previously rely on more stable historical records to forecast environmental risk, the variability of climate patterns due to climate change requires more granular and dynamic modelling. We work with reinsurers and specialists in various types of physical risks to model how each will change for specific geographic regions and populations.

Ultimately, the models need to be translated into changes in pricing and insurance terms and conditions. We take considerable care in communicating these changes with our customers and advisers to ensure they can adapt accordingly. As far as possible, we aim to continue to underwrite our clients for risks they are not able to carry themselves while ensuring we do not jeopardise our business by takingon insurance risks beyond our means to manage. Our first priority is to remain a sound business by understanding the changes in risk and ensure we price and underwrite them correctly.

Where risks become uninsurable and reinsurers exit types of cover or regions, we may be forced to do the same. The emergence of insurance gaps in many countries is a major concern, particularly in countries where government does not have the financial resources to assist. We aim to minimise these gaps by engaging with private and public partners to strengthen resilience against increasing perils caused by climate change. Examples include enhancements to fire fighting and detection equipment and rebuilding infrastructure to improve flood protection.

Collective action for meaningful change

Our climate change-related risk modelling does more than protect our business. It enables us to share our expertise, data and models to help industry and governmental stakeholders enhance resilience to natural disasters. We leverage our data and geo-coding tools to augment the sophistication of our models for extreme weather risks such as droughts, fires and floods. We are seeking partners with whom we can share this information to help improve resilience in high-risk areas. This is critical in reducing the looming financial burden of climate change on consumers, communities and nations - as the cost of mitigation is almost always less than the cost of disaster.

Social cohesion and collaboration across nations, industries and communities is critical in responding to climate change. Africa, including the 13 African countries in which Old Mutual operates, faces particularly severe risks. This is due to the continent's vulnerability to severe weather events such as droughts and flooding, as well as its constrained resources for building resilience and mitigating disasters. However, many African nations are rich in renewable energy sources, which supports proactive climate strategies that can drive Africa's progress and ability to benefit from the opportunities in adapting to climate change quickly and effectively.

Old Mutual is proud to have become a signatory to the NDSI in 2023. The NDSI is a membership organisation that seeks to incorporate ESG principles into the core business of African insurers. The 130 African NDSI insurers collaborate to address some of Africa's most pressing challenges. Relevant to this report is the work being done to establish the African Climate Risk Facility, which aims to underwrite $14 billion of cover for climate risks by 2030. This facility will protect 1.4 billion people against floods, droughts and tropical cyclones.

As part of NDSI, we pledge to support the UN Sustainable Development Goals by proactively addressing climate change, promoting sustainability within insurance, advancing towards net zero emissions economies and collaborating with stakeholders to promote sustainable insurance practices. Although climate change brings a considerable increase in insurance risk, we believe there are many opportunities for Africa to lead in a Just Transition - in taking urgent climate action and creating economic prosperity and employment at the same time.

We all have a responsibility to limit our impact on the finely balanced ecosystems that sustain us, and we have a duty to our fellow citizens to save lives and livelihoods by tackling climate change while building a more just and equitable world. I am confident that Old Mutual is playing a leading role in our countries of operation and in global forums to meet these obligations. While climate change presents formidable challenges, we will continue to work with all stakeholders to drive urgent and considered action.

Richard Treagus Chief Risk Officer

Overview of our business

South Africa

Southern Africa

East Africa

West Africa

Asia

In China, we provide life insurance and investment solutions to high-net-worth retail customers through a 50:50 joint venture with China Energy Capital Holdings, a subsidiary of China Energy (a State Owned Enterprise).

• 1 We have refined our definition of employee and restated the 2022 numbers. Our workforce is defined as permanent and non-permanent Old Mutual employees and contingent workers which include consultants, contractors, service providers and vendors

• 2 Customer numbers for South Africa include policy count for Old Mutual Insure

Old Mutual is a premium African financial services Group that offers a broad spectrum of financial solutions to retail and corporate customers across key market segments in 14 countries.

Old Mutual's primary operations are in South Africa and other African regions, and we have aniche business in China. We are well positioned in the insurance market with a large customer base, a valuable and trusted brand, and most of our core businesses holding leading market positions while making investment in our growth engines and markets. We have structured our operating segments to deliver our products and services to our customers according to their needs.

We believe that creating value for customers ultimately drives value creation for shareholders. We create value through solutions delivered against our integrated financial services and interconnected strategy. We offer comprehensive solutions across Africa to meet our customers' needs at every life stage. We will accompany them on their life journey as a trusted steward through multiple channels, platforms and comprehensive financial products and services anchored in rewards that aim to promote behaviours linked to holistic financial wellness. We conduct business responsibly to deliver a sustained positive impact across all our stakeholders: customers, employees, intermediaries, investors, regulators and the communities in which we operate.

The core of who we are

Our purpose is to champion mutually positive futures every day

We want to be our customers' first choice to sustain, grow and protect their prosperity, which is anchored in our purpose. This means that we aim to be their preferred partner for financial wellness and help them achieve their lifetime financial goals.

We deliver our solutions through our distribution channels

We embrace a human-led, technology-enabled distribution model. We deliver personalised advice and solutions using real-time data and insights through our extensive distribution network and strong digital engagement to ensure our customers and advisers can interact with us in a way that is most convenient for them. Our face-to-face and digital channels provide customers more choice as we move towards delivering a consistent omnichannel experience.

41 117

(2022: 39 238)

Tied and independent intermediaries

Our intermediaries are the competitive advantage through which we deepen our relationship with our customers in various segments. They are core to our ability to execute our integrated financial services ambition, differentiated by holistic advice, face-to-face interactions, trust and relevance built through meaningful engagements.

796

(2022: 826) Retail branches

Our retail branches facilitate a seamless customer experience by providing direct access to products, servicing and advice. Our branches recruit intermediaries from the communities in which we operate. Branded ATMs support our retail branch network to improve access and convenience for customers.

1.4 million

(2022: 1.2 million) Active digital users

The MyOldMutual integrated needs based goals and financial wellness ecosystem encompasses digital platforms such as the Old Mutual app, WhatsApp, USSD and an online platform that seamlessly integrates into a digital experience. Our service centres, advisers and customers can see and engage with the ecosystem.

48 331

(2022: 48 731)

Worksites

Worksites enable us to take an advice-led approach by offering solutions to our customers in their workplace as an extension of the employee value proposition. Our worksites have skilled financial advisers who assist our customers with preserving their wealth and achieving better retirement outcomes.

We base our investment and underwriting decisions on the latest climate science, ensuring that we consider the most recent climate projections and need for climate change mitigation.

Climate context - the journey to net zero

The scientific basis

The IPCC is the UN body for assessing the science related to climate change. The IPCC prepares comprehensive assessment reports about the state of scientific, technical and socio-economic knowledge on climate change, its impacts and future risks, and options for reducing the rate at which climate change happens. The IPCC also produces special reports on topics agreed to by its member governments, as well as methodology reports that provide guidelines for the preparation of GHG inventories. The latest report is the sixth assessment report, comprising three working group contributions and a synthesis report1. In the latest World Economic Forum Risk Report2 based on the IPCC findings, it is predicted that the 1.5°C threshold will be breached at current emission rates. Given the systemic contagion at a global and regional level, scientific evidence indicates that we are accelerating to a 3°C world. Should this happen, there will be large-scale changes on the planetary systems. There is a high level of confidence that systems such as low-latitude coral reefs will die and the ice sheets will collapse in the next decade. This would have impacts on food, water and health security.

Scientific evidence indicates the changes in the climate system and the need for climate management.

The IPCC is responsible for researching and producing scientific data that assists countries in making policies on climate matters3.

The research indicates that:

Climate science defines a carbon budget as a maximum amount of cumulative net global anthropogenic CO2 emissions that would, with some probability, limit global warming to a given level (for example 1.5°C to 2°C).

According to the IPCC, the remaining carbon budget, with a 50% likelihood of limiting global warming to 1.5°C, is 500 gigatonnes carbon dioxide equivalent (GtCO2e)1. Based on the rate of emissions at the time, this budget was expected to be exceeded by 2032. A recent study found that the remaining carbon budget now stands at 250 GtCO2e5. Based on the current rate of emissions of 40 GtCO2e per annum, the carbon budget will be exceeded in fewer than six years. This means that even if we achieve net zero emissions by 2050, we could still overshoot 1.5°C. It is therefore necessary to frontload decarbonisation efforts as early as possible.

Global response

Governments and organisations have committed to combat climate change and join the journey to net zero.

Through international agreements, including the Paris Agreement, nations and leaders of various countries have committed to collectively reducing GHG emissions, which acts as a global catalyst for climate change action6.

The Paris Agreement was adopted at COP21 in 2015. Its central aim is to strengthen the global response to the threat of climate change by keeping the global temperature rise to less than 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5°C. COP28 was a global stocktake event, taking place during November and December 2023, to monitor the implementation and gauge progress against the Paris Agreement goals. The Paris Agreement was negotiated and adopted by parties (countries) who are signatories to the UN Framework Convention on Climate Change. As part of the agreement, anthropogenic GHG emissions need to be reduced to achieve the global temperature goal and reach net zero emissions by 2050.

Nationally Determined Contributions (NDCs) are non-binding, climate action plans to cut national GHG emissions and adapt to the adverse impacts of climate change. NDCs are at the heart of the Paris Agreement and the achievement of its long-term goals. NDCs embody efforts by each country to reduce national emissions. The Paris Agreement (Article 4, paragraph 2) requires each party to prepare, communicate and maintain successive NDCs that it intends to achieve. Parties should pursue domestic mitigation measures with the aim of achieving the objectives of such contributions.

According to the latest NDC synthesis report7, the submitted NDCs cover 95% of total global emissions. Of the 168 parties to the Paris Agreement, 153 submitted new or updated NDCs with only 20 parties having submitted new or updated NDCs since September 2022. The full implementation of the latest NDCs would lead to a 5.3% emission reduction by 2030 relative to 2019 levels whereas the implementation of only the unconditional elements would lead to a 1.5% increase in emissions by 2030 relative to 2019 levels.

COP28 was held in the United Arab Emirates in 20238. One of the main highlights of the conference was the pledging of $57 billion for various climate responses, including $725 million for the loss and damage fund to cover destruction caused by climate change, mostly in developing countries. The Global Renewables and Energy Efficiency Pledge commits countries to tripling their renewable energy capacity by 2030. The adoption of the Global Goal on Adaptation, introduced at COP28, is a step forward as it recognises the importance of securing adequate public finance for adaptation from developed countries.

The next focus is on COP30 where parties will be required to submit their updated NDCs based on the latest global stocktake.

In the past year, the global energy landscape has changed dramatically. The supply disruptions and soaring energy prices that were experienced in some regions brought energy security to the fore with many countries looking for local or alternative energy sources to increase their energy security. It has been argued that these changes represent a tipping point for accelerating the transition to clean energy. The need for increasing energy security provides a strong motivation for accelerating the deployment of renewable energy.

The footnote references for this section can be found on page 74