Leaders from nearly 200 countries are in Baku, Azerbaijan, this week and next to strike a deal on how wealthy nations like Canada ought to finance the global fight against climate change. 

The annual UN climate conference comes amid record-high global temperatures in 2024, surpassing last year’s record, alongside unprecedented global carbon emissions from fossil fuels. 

With over US$1 trillion annually needed to address the crisis, this year’s COP29 event is being billed as the “finance COP.” But Canada’s big banks and investors are noticeably absent from Baku, dampening expectations for a meaningful outcome. Here’s what you need to know: 

What is COP?: The Conference of the Parties is an annual summit where leaders from nearly every nation decide by consensus how to address the climate crisis. It’s where major climate pledges are made, like the Paris Agreement to limit global warming to 1.5 C below industrial levels. This year is the 29th summit, hence COP29. 

COP also serves as a venue for industry leaders, investors and policymakers to pitch solutions to curb global warming. Shadowing this year’s conference is U.S. president-elect Donald Trump’s plan to once again pull out of the Paris Agreement, multiple wars, and a host country whose president’s views on fossil fuels seem fundamentally at odds with the clean energy transition. In his opening speech at COP29, Azerbaijan’s President Ilham Aliyev called oil and gas a “gift from god.” 

Lingering questions: Canada played a key role in wrangling wealthy countries to commit US$100 billion a year to finance climate change mitigation and adaptation. That agreement, reached in 2009, expires at the end of this year, meaning leaders in Baku need to come up with a new target. “Things have changed a lot since that goal was first set,” said Canada’s Environment Minister Steven Guilbeault at a press conference at COP29 Tuesday. Canada is the world’s 10th largest carbon emitter, accounting for about 1.6 per cent of global emissions in 2023. 

Who will contribute to the fund and how much are questions up for debate. In the past, public financing made up the bulk of the capital. But there’s discussion this year about tapping other sources, like multilateral development banks and private investors.

“This cannot come from public funds alone,” Guilbeault said Tuesday. “We need to get banks, financial institutions and multilateral institutions to be more ambitious.” 

An early win for Canada: In the spirit of recruiting private investors to the cause, Guilbeault unveiled a US$1.48-billion fund (about $2 billion) on Tuesday that pools government and private sector money to address climate change. The partnership, called GAIA, includes international investors Mitsubishi Financial Group, the Green Climate Fund and the Global Environmental Facility, as well as national development financier FinDev Canada. It will contribute 25 per cent of the fund to what it calls “least developed countries” and “small island developing states,” with 70 per cent of the fund reserved for climate adaptation projects. Between FinDev Canada and the federal government, Canada contributed $160 million to the fund, Guilbeault said. 

Financial institutions sit out: Despite the emphasis on private capital, just one of Canada’s eight largest pension fund managers—the Caisse de dépôt et placement du Québec—has someone on the ground in Baku, their spokespeople confirmed to The Logic. Two of the country’s Big Six banks—RBC and National Bank of Canada—confirmed they are not attending either, while the other four did not respond to The Logic’s request. 

It isn’t just Canadian financiers who stayed home. The heads of the Bank of America, BlackRock, Standard Chartered and Deutsche Bank are also absent, as is Mark Carney, the Brookfield Asset Management chair and the UN Special Envoy for Climate Action and Finance, the Financial Times reported. Carney was a prominent figure at the 2021 COP conference in Glasgow, where he rallied hundreds of financial firms to set bold climate goals. 

While private financial institutions aren’t part of formal negotiations, their money is needed to follow through on solutions countries agree to at COP. 

“I would like to see more financial institutions be a part [of COP],” said Justin Riemer, CEO of Emissions Reduction Alberta, who is in Baku this week. His company uses provincial government funds to support cleantech companies and projects that heavy-emitting industries are undertaking to lower their emissions. “With a number of these projects, the economics are really challenging,” said Riemer. “Capital is tighter than it was a year or two ago.”

“An agency like ours is willing to take a risk and provide a secure investment,” he said, “and that should be matched by private capital.”

The energy sector fills the void: Canadian energy companies are milling the conference halls, pitching their business and gleaning ideas from international peers. Kendall Dilling, the head of lobby group the Pathways Alliance, is in Baku representing Canada’s oilsands, along with three other representatives from the sectors. 

Glen McCrimmon, director of the Clean Resource Innovation Network (CRIN), a non-profit that funds efforts to decarbonize the oil and gas sector, is at COP to promote the organization’s funding model and potentially find international partners. 

For every project it funds, CRIN requires an industry participant, along with an innovator, McCrimmon said. “There’s a market pull already embedded,” he said of the model. “It helps enable the actual adoption of the technology at the end of the day.” 

Canada’s nuclear energy industry is also at COP, where it has a captive audience of world leaders seeking low-emissions energy sources. “You’re seeing an evolution of the inclusion of nuclear technologies from one COP to another,” said George Christidis, acting CEO of the Canadian Nuclear Association. “There’s real momentum in terms of the recognition by the international community that to meet those emission targets, you need all non-emitting technologies, including nuclear.” 

Canada has helped lead the push for nuclear energy as a clean alternative to fossil fuels. It was among the countries that launched a declaration at COP28 in Dubai to triple nuclear energy capacity by 2050. In September, Brookfield endorsed the goal along with 13 other financial institutions.

Low expectations for bold agreements: The biggest breakthrough so far at COP29 has been the decision on global carbon-market standards, which has been years in the making. The agreement paves the way for a UN-backed carbon-trading market that will let governments and companies pay for projects anywhere in the world that reduce CO2 emissions, and in exchange receive credits to offset their own emissions. 

Beyond that, Ryan Riordan, director of research at Queen’s University Institute for Sustainable Finance, said his expectations for bold new commitments are low. There are relatively few attendees compared to other COPs, with some abstainers citing Azerbaijan’s closeness with Russia as a concern. Climate advocates, meanwhile, believe Trump’s plan to pull out of the Paris Agreement will thwart climate progress. “There’s just a lot of other things going on,” said Rioridan. “I think most people are expecting that this is going to be an incremental COP.”