COP31 raises questions for international business over climate finance and fossil fuels
Published on 11 November 2026
Carbon credit rules and border measures could affect investment decisions and the cost of international trade
At a glance
Turkey and Australia share hosting responsibilities, with separate roles for the conference agenda and formal negotiations.
Negotiators face unresolved questions about adapting to climate change and supporting workers and communities through the transition.
Voluntary initiatives sit alongside formal talks, with different implications for how countries turn existing commitments into action.
The 31st United Nations climate conference (COP31) opened this week in Antalya, Turkey and will run until 20 November, with its crucial world leaders' summit on 11 and 12 November. For the first time, there are two "hosts" at the conference. Turkey hosts the conference, holds the conference presidency and leads the action agenda; Australia has exclusive authority over the formal negotiations as president of negotiations.
Both co-hosts want COP31 to turn commitments made at earlier conferences into action. The European Union arrives with a mandate, which was approved by the Council of the EU on 12 October. That negotiation position calls for concrete results at COP31 and is accompanied by separate conclusions on climate finance.
Transition from fossil fuels
COP30 in Belém did not agree a negotiated roadmap. Instead, the Brazilian presidency committed to producing a voluntary roadmap for the transition away from fossil fuels t ahead of COP31. The plan would have the backing of a coalition of willing countries rather than consensus. Countries also set up a Global Implementation Accelerator . Australia has said it will continue to argue for the transition, though as a major fossil-fuel exporter its own position will be closely scrutinised.
Adaptation
Work under the global goal on adaptation centres on implementing the Belém Adaptation indicators.
The sharpest dispute is whether negotiating texts should refer to the COP30 goal of tripling adaptation finance.
Climate finance
Developing countries want a separate agenda item on developed countries' obligation to provide finance under article 9.1 of the Paris Agreement to be treated as a standalone agenda item. Access to finance and delivery against existing goals are likely to dominate.
'Just transition'
COP31 is expected to settle the structure and functions of the "just transition" mechanism agreed in Belém. The mechanism concerns support for workers and communities affected by the shift to a low-carbon economy.
Carbon markets and trade
Further technical decisions on carbon markets under articles 6.2 and 6.4 of the Paris Agreement could affect how credits are valued and traded. These concern approvals for credit transfers, accounting adjustments to prevent double counting, and registries that record credits.
Tensions over unilateral carbon border measures, including the EU's carbon border adjustment mechanism, are emerging as a negotiating flashpoint.
Alongside the negotiations, Turkey's action agenda covers 10 priority areas, including clean energy, industrial transformation, food security, urban resilience and zero waste. These initiatives are voluntary and do not form part of the negotiated outcome.
Finance divides negotiators
Preparatory talks in Bonn produced mixed results. Negotiators made progress on the Just Transition mechanism but reached no agreement on mitigation or adaptation, with finance the main obstacle. The UN climate secretariat's executive secretary urged the presidency to convene ministers early so the hardest issues could be worked through before Antalya.
COP31 is expected to deliver gradual progress on technical issues. Finance could determine how much progress negotiators make on the main commitments.
Osborne Clarke comment
The strength of any negotiated text on the COP28 fossil-fuel transition commitment could signal the pace of future policy change for energy-intensive sectors and their lenders. The number of countries backing the Brazilian roadmap will offer a further indication of that momentum.
Article 6 decisions and changes to authorisation and corresponding adjustment rules could affect the value and usability of credits. The impact on buyers and sellers may depend on how their contracts allocate these risks.
The scale of climate finance and how it is distributed will influence investment flows into emerging markets. It may also raise expectations of how companies manage risks from extreme weather and other physical effects of climate change.
International talks on trade and carbon border measures could affect exporters and importers of carbon-intensive goods.
Georgia Phillips, Sustainability and Reporting Lead, at Osborne Clarke, contributed to this Insight.
The Osborne Clarke team can provide further information of these developments and related issue. Please get in touch with our experts.
