By María Mendiluce* and Marina Grossi** for One Planet

The transition to a low-carbon economy is underway, but still at a slower pace than necessary to contain the impacts of global warming. Global greenhouse gas (GHG) emissions continue to rise, and the world is headed for a global temperature rise of between 2.6°C and 2.8°C by the end of the century, according to the UN Emissions Gap Report 2024, released on the eve of COP29 in Baku, Azerbaijan. It is still within humanity's reach to change this trajectory, and to do so, it will be necessary to reduce global emissions by 28% by the end of this decade and by 37% by 2035. This is the new threshold that should be considered for collective emissions reductions in Nationally Determined Contributions (NDCs).

As host of COP30 and a historically key player in global environmental diplomacy, Brazil is strategically positioned to promote the implementation of more ambitious targets to achieve the objectives of the Paris Agreement, chief among them limiting the increase in global average temperature to 1.5°C above pre-industrial levels. We already temporarily exceeded this limit last year, and decisive action is needed to prevent the planet from continuing to warm at an accelerated rate. More than ever, it is necessary to align national and international efforts toward a just, ethical, and equitable transition to a low-carbon economy that is both nature-friendly and capable of adapting the necessary infrastructure.

Brazil's new NDC, presented in November 2024 at COP29, is a milestone in this journey, as it establishes clear guidelines for emissions reductions, promotes innovation, and strengthens collaboration between government, civil society, and the private sector. Brazil was the second country in the world to take this step and present its new contribution. Although the target has divided opinions among experts regarding its level of ambition, the new document marks a step forward in Brazil's ambition by targeting emissions reductions of between 59% and 67% by 2035 compared to 2005 levels. Based on this new milestone, the Brazilian Business Council for Sustainable Development (CEBDS) and the We Mean Business Coalition (WMBC) developed strategic recommendations for the private sector to actively participate in the process of implementing Brazil's NDC to its full potential.

We compiled these recommendations in the document "How the new Brazilian NDC can stimulate private sector investment in climate action" and presented it to COP30 Executive Director Ana Toni, who is also the National Secretary for Climate Change at the Ministry of Environment and Climate Change (MMA). In addition to a general analysis of the Brazilian NDC, the document examines existing plans in key sectors of the Brazilian economy: Land Use Change, Agriculture, Energy and Transportation, and Industry – with suggestions for public policies and incentives to strengthen private sector participation in the climate agenda. The goal is for the recommendations presented to be converted into concrete actions, positioning Brazil as a global benchmark for climate action.

In the Land Use Change sector, which accounts for half of Brazil's greenhouse gas emissions, the document lists as priorities combating deforestation, promoting nature-based solutions, and creating incentives for accounting and reducing scope 3 emissions in the private sector. In Agriculture, it suggests adopting regenerative and low-carbon agricultural practices. In the Energy and Transportation sector, the country has the advantage of having 85% of its electricity matrix based on renewable sources and can lead the global energy transition. In Industry, it is possible to advance low-emission technologies, such as the electrification of processes, increased use of biofuels, and the development and scaling of carbon capture technologies.

It's important to emphasize that, to be successful, an NDC needs to "land"—that is, transform its guidelines into real policies and projects. In this sense, the document recommends key measures to improve private sector performance and investment through the NDC implementation process: the first is to align sectoral policies with the NDC's objectives, facilitating the implementation of actions. In our view, aligning sectoral plans with Brazil's goals under the Paris Agreement is a fundamental step toward implementing public policies and defining priorities for the business sector and foreign investors ahead of COP30.

Second, it is necessary to encourage corporate climate action and transition plans, as much of the emissions reductions required to meet the NDC will come from the private sector. Leading companies are working to decarbonize their operations and value chains and promote the adaptation of their infrastructure, but they need a robust policy environment and financing instruments to move forward more quickly. In this scenario, it would be essential for the Brazilian government to establish economic and fiscal incentives for companies to advance their corporate transition plans.

Finally, it is crucial to expand dialogue between the public and private sectors, with ongoing spaces where policymakers and business leaders can discuss potential obstacles, build and expand trust, encourage adherence to the process within companies and government agencies, and establish joint mechanisms for monitoring progress in implementation.

Brazil has already taken the lead with an ambitious new NDC. The 2035 targets represent a substantial improvement over the previous 2030 targets, signaling Brazil's commitment to reducing its emissions. And while it does not establish a specific timeline for driving the energy transition away from fossil fuels, the NDC emphasizes the importance of replacing carbon-intensive sources in the power, transportation, and industry sectors with cleaner solutions, such as electrification and biofuels. The recent regulation of the carbon market, with the approval of the Brazilian Emissions Trading System (SBCE) at the end of 2024, also brings with it the expectation of driving the decarbonization of some production systems, especially those linked to the power and industry sectors, and will stimulate unregulated agents with a source of financial resources for climate innovation projects in Brazil.

For a more ambitious NDC to translate into concrete actions, a well-defined implementation schedule, the engagement and mobilization of different stakeholders, and mechanisms to stimulate capital contributions are necessary. Thus, the business sector will be crucial in enabling national climate commitments. Innovation, investment in clean energy, and accelerating the decarbonization of its production systems are in the hands of companies. This will allow Brazil to increase its energy security and industrial competitiveness, and create new market opportunities, strengthening the Brazilian economy and helping humanity curb the climate crisis, which is already causing so much human and material loss. COP30 is already generating high expectations and will turn the world's attention to the Amazon, offering a unique opportunity to channel climate action by countries and companies and pave the path we want for the world in the coming years.

* María Mendiluce is CEO of the We Mean Business Coalition, an international organization working with the world's most influential companies to combat climate change. The Coalition is made up of seven nonprofits: BSR, CDP, Ceres, Climate Group, CLG Europe, The B Team, and WBCSD.

** Marina Grossi is president of CEBDS (Brazilian Business Council for Sustainable Development), an organization with 28 years of experience and 120 large member companies.