New Developments in Global Climate Governance: Analysis of COP29 Decisions and Business Implications | Latest Information | ASUS ESG website, ASUS ESG goal

Climate change is no longer a distant threat but humanity's most pressing current challenge. According to UNEP's latest Adaptation Gap Report, global average temperatures in 2024 rose nearly 1.5°C above pre-industrial levels, surpassing 2023's historical record. Without immediate and more aggressive mitigation actions, end-of-century warming is projected to reach 2.6-3.1°C. This warming rate is intensifying the frequency and strength of extreme weather events, from heatwaves and droughts to floods, causing unprecedented impacts on global socioeconomic development and ecosystems.

Extreme weather events not only threaten human life but also bring enormous economic losses. McKinsey's analysis indicates that physical risks from climate change are affecting global supply chain stability, challenging every sector from agricultural production to infrastructure. Developing countries, in particular, often bear the most severe climate change impacts due to vulnerable infrastructure and insufficient adaptation capacity. UNEP estimates that developing countries will need $215-387 billion annually in climate adaptation funding over the next decade, a figure that will continue to rise as climate pressures increase.

The Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) is the core platform for global climate action. Since its first meeting in 1995, COP has evolved into a crucial forum where governments, international organizations, NGOs, and businesses discuss climate policies. The 1997 Kyoto Protocol specified greenhouse gas emission reduction targets for industrialized countries, while the 2015 Paris Agreement reached at COP21 marked a crucial milestone, establishing the goal of limiting global warming to below 2°C above pre-industrial levels, with all nations assuming common but differentiated responsibilities for carbon reduction.

COP's importance lies not only in providing a global dialogue platform but also in establishing concrete international action mechanisms. These mechanisms include climate finance, carbon markets, technology transfer, and global stocktake mechanisms, providing institutional support for global climate action and helping countries strengthen their capacity to address climate change.

The 29th Conference of the Parties (COP29) in 2024 achieved significant progress on multiple issues. Climate finance discussions garnered the most attention. Developing countries' actual climate response funding needs far exceeded expectations, while developed countries' promised support of $100 billion annually for 2020-2025 was not only clearly insufficient but also not delivered on time, seriously affecting developing countries.

After intensive negotiations, COP29 achieved a major breakthrough: developed countries committed to providing at least $300 billion annually in climate finance by 2035, while all parties agreed to increase total public and private funding to at least $1.3 trillion. Although this target falls below some countries' expectations, it marks a substantial step forward in international climate finance.

Breakthrough progress was also made on Article 6 carbon market mechanisms of the Paris Agreement. COP29 established important frameworks for calculating net carbon reduction benefits, defining carbon credits, and measuring standards. Notably, the conference required specific management rules for natural solutions like afforestation, which will help improve the quality and credibility of carbon credit projects. Although some implementation details still need refinement, this announces the formal establishment of a global carbon market framework.

Regarding mitigation and adaptation, COP29 continued the Global Adaptation Goal Framework adopted at COP28, launching a two-year global adaptation work program. This program aims to establish a comprehensive indicator system covering seven key areas including water resources, food security, and ecosystems by 2030. However, parties remain divided on adaptation mechanisms: the EU and other developed countries favor flexible indicators, while the African Union and developing countries advocate for clearer tracking mechanisms, differences that await resolution in subsequent negotiations.

COP29 included digital transformation in its formal agenda for the first time, highlighting technology innovation's crucial role in climate action. The conference designated November 16 as Digital Day and issued the Green Digital Action Declaration, gaining support from over a thousand members including international organizations, Google, IEEE, ISO, Nokia, and SAP. Parties committed to strengthening ICT industry carbon reduction and accelerating digital technology innovation in climate monitoring, energy optimization, and other areas, marking the deep integration of digital and sustainable transformation.

COP29's decisions bring three important implications for businesses. First, regarding environmental information transparency, the new climate finance framework and carbon market rules require businesses to establish better environmental data management systems. Companies need comprehensive control over their carbon emissions, energy use, and water consumption indicators. Multinational corporations especially need to respond to different market regulatory requirements and ensure information disclosure consistency and comparability.

Second, regarding supply chain resilience, increased extreme weather events require companies to review their supply chain risk management strategies. This includes assessing suppliers' climate risks and developing diversified supply sources. Companies also need to help suppliers improve climate adaptation capacity through technical support, capacity building, and even financing assistance to build more resilient supply networks.

Third, clean technology investment opportunities have significantly increased. As climate finance scales up, companies should early evaluate and position themselves in emerging technologies like hydrogen energy, carbon capture and storage, and energy storage. This not only helps reduce operational environmental footprints but can also secure advantages in emerging markets. Innovative applications of digital technologies, from smart grids to energy management systems, could become important competitive advantages for businesses.

ASUS demonstrates comprehensive strategic planning and concrete results in sustainable development. On September 2nd, 2024, ASUS Chairman, Jonney Shih, stated at the " Carbon Sink and Biodiversity ESG Project Matching Platform" hosted by the Forestry and Nature Conservation Agency that ASUS builds a complete Natural Capital Strategy Map focusing on both within-value-chain management and beyond-value-chain actions.

Within the value chain, ASUS focuses on the environmental and biodiversity impacts of corporate operations and supply chains. They thoroughly assess major products' impacts on environmental and water pollution to understand manufacturing environmental footprints and formulate corresponding reduction strategies. These assessment results and reduction progress are regularly disclosed through natural impact reports.

In reducing supply chain environmental impacts and strengthening resilience, ASUS achieved several important goals in 2023: completing human rights and labor practice audits for all key suppliers, benefiting 440,000 times of labor right protected since 2013; in energy and carbon management certification, 40% of key assembly facilities and key suppliers obtained ISO14064 verification, 80% of assembly facilities gained ISO50001 certification, successfully reducing key suppliers' greenhouse gas emission intensity by 26%. We actively promote suppliers' use of renewable energy, expecting suppliers accounting for the top 50% of procurement value to achieve 40% renewable energy power usage by 2024. To ensure operational stability, ASUS established a complete conflict minerals management mechanism, ensuring 100% of materials like tantalum, tin, gold, and tungsten come from qualified smelters, effectively reducing social and environmental risks in the supply chain.

In product innovation, besides launching carbon-neutral laptops, Zenbook S 13 OLED (UX5304M), ASUS uses recycled materials and emphasizes product circularity, with the ROG Strix G18 achieving an excellent 8.6 score in French repairability index evaluations. Related product packaging uses 90% recycled pulp and 90% FSC™-certified paper materials, demonstrating firm commitment to reducing environmental impact.

Responding to consumers' focus on sustainable products, ASUS developed a digital product passport system. For example, laptop model B3605CCA comes with a dedicated digital product passport providing complete information on product details, repair support, product sustainability, and certifications. Consumers can access product sustainability information by scanning the QR code on products when shopping, serving as an important reference for purchase decisions.

COP29's outcomes demonstrate the international community's determination to address climate change, but considerable distance remains from achieving Paris Agreement goals. Corporate climate governance faces three core challenges: ensuring companies implement commitments and strengthen execution, accelerating technological innovation to reduce fossil fuel dependence, and ensuring transition process fairness to avoid exacerbating social inequality.

As core economic actors, businesses play a crucial role in global net-zero transition. Only companies that can early identify risks, seize opportunities, continuously drive innovation, and deeply integrate sustainable development into corporate strategy can maintain long-term competitive advantages in the low-carbon economy era and create new business value.