Policy briefs / Reports

During the COP30 Local Leaders Forum, held in Rio de Janeiro from November 3–5, 2025, WWF and the Alliances for Climate Action mobilized a cohort of 25 fellows from subnational governments in Argentina, Chile, Colombia, Mexico, and South Africa to take part in a series of learning sessions to foster peer exchanges and forward thinking. Over the course of four thematic sessions, and broader participation in C40 programming, participants explored how cities and regions are driving high-integrity climate action, tackling plastic pollution through community engagement, placing nature at the heart of local climate agendas, and advancing multi-level climate governance through subnational leadership. These dialogues showcased innovative approaches, highlighted practical solutions, and reaffirmed the critical role of local governments in accelerating climate and nature action across Latin America and beyond.

Durante el Foro de Líderes Locales COP30, celebrado en Río de Janeiro del 3 al 5 de noviembre de 2025, WWF y Alliances for Climate Action movilizaron a un grupo de 25 becarios de gobiernos subnacionales de Argentina, Chile, Colombia, México y Sudáfrica para que participaran en una serie de sesiones de aprendizaje destinadas a fomentar el intercambio entre pares y el pensamiento innovador. A lo largo de cuatro sesiones temáticas y una participación más amplia en la programación del C40, los participantes exploraron cómo las ciudades y las regiones están impulsando acciones climáticas de alta integridad, abordando la contaminación plástica a través de la participación comunitaria, situando la naturaleza en el centro de las agendas climáticas locales y promoviendo la gobernanza climática multinivel a través del liderazgo subnacional. Estos diálogos mostraron enfoques innovadores, destacaron soluciones prácticas y reafirmaron el papel fundamental de los gobiernos locales en la aceleración de las acciones climáticas y naturales en América Latina y más allá.

The 30th session of the Conference of the Parties (COP 30) to the UNFCCC marks the 10-year anniversary of the adoption of the Paris Agreement, a landmark achievement in multilateral cooperation towards tackling the climate crisis. Much has advanced in the past decade, but much remains to be done to get the world on track to meet the longterm temperature goal of the Agreement. In that sense, a total of 64 Nationally Determined Contributions (NDCs) were considered by 30 September 2025 as the next generation of NDCs. Nearly all of them were informed by the outcome of the first Global Stocktake (GST), which provided an assessment of the collective progress towards achieving the Paris Agreement goals. The GST also provided a roadmap for global climate action to align itself with these goals, by pointing out gaps to bridge, barriers to overcome and opportunities to replicate and scale up. The new NDCs reflect a deepening and more structured engagement of non-Party stakeholders (NPS) in climate action, with 95 per cent of Parties reporting engagement of NPS in NDC implementation. The crucial contribution of NPS to global climate action was recognized earlier in the UNFCCC process, with the appointment of Climate High-Level Champions (CHLC) in 2015 and the launch of the Marrakech Partnership for Global Climate Action (MP) the following year. At COP 29, the mandate of the CHLC was renewed until 2030, and as a result, a new proposed five-year vision was developed to guide the work going forward – a vision informed by the COP 30 Climate Action Agenda proposed by the Brazilian Presidency in the spirit of mutirão (collective action), and supported by the COP 29 CHLC. This Agenda, organized into six thematic axes and 30 key objectives centred around the GST outcome, seeks to encourage accelerated implementation and enhanced transparency, building on the negotiated outcomes of the UNFCCC process. The 2025 Yearbook – the ninth iteration of its series – has been structured around these axes and objectives, with the purpose of providing a progress-looking report aligned with the Global Climate Action Agenda and the first GST outcome. Each chapter thus addresses a Climate Action Agenda axis, with a final chapter presenting a forward-looking approach to track progress and drive implementation. Each of the axis-oriented chapters in turn presents four sections, summarized below.

Climate and biodiversity are inseparable, yet global action to address them remains divided. As countries and non-state actors ramp up pledges, analysis and monitoring often lack one essential ingredient: knowing where implementation actually happens. Without spatial data, we cannot see progress, verify impact, or ensure fair outcomes. A new commentary in npj Climate Action urges that climate and biodiversity tracking be rooted in place. 

To have a realistic chance of limiting global average temperature increase to 1.5°C with no or limited overshoot, the world must reach net zero carbon dioxide (CO2) emissions in the early 2050s, alongside rapid, deep, and sustained reductions in other greenhouse gas (GHG) emissions. All GHG emissions should reach net zero about two decades later. Yet net zero — the only solution to halting human-caused climate change — has entered a more contested phase. Ten years after 195 nations signed the Paris Agreement, it has become a political battleground, most visibly in the US.

Still, the global signal endures in the lead up to the COP30 in Belém: net zero targets continue to spread, and standards are tightening. Progress on national targets is especially critical in 2025, as countries submit new or updated NDCs for 2035 (NDC 3.0) in line with the 2015 Paris Agreement’s ‘ratchet mechanism’. 

This report assesses whole-economy net zero target-setting and evaluates more than 4,000 entities on key elements of integrity — essentially, whether targets and strategies contain key components, such as plans and interim goals, needed for deep decarbonisation over the next few decades. This year, we also examine how net zero targets address the climate-nature nexus.

The climate governance chain in the financial sector is fundamentally broken. Despite growing awareness of climate risks and an increasing number of net-zero commitments, the sector remains structurally unfit to support a transition to a Paris-aligned economy. The key actors within the governance chain – comprising financial institutions (FIs), climate cooperative initiatives (CCIs) and regulators – have thus far failed to deliver the coordination, ambition and accountability needed. In its current form, the financial sector is unlikely to align with the Paris Agreement, let alone act as an enabler of the low-carbon transformation.

The symptoms of this breakdown are already visible. Financial institutions continue to channel capital into high-emissions sectors, with an estimated USD 3.7 trillion annually flowing into fossil fuels like oil, gas and coal (World Economic Forum, 2023). Climate cooperative initiatives (e.g. GFANZ) have largely failed to translate pledges into tangible decarbonisation outcomes in the real economy. Regulators and market environments, even in jurisdictions with greater attention to climate change, have not created the incentives and rules necessary to promote a shift to Paris-aligned finance. In some jurisdictions, climate alignment in the financial sector is even actively undermined.

Each actor in the governance chain bears responsibility for aligning financial strategies, portfolios and capital flows with the transition to a net-zero, climate-resilient economy. Structural barriers, such as the difficulty of pricing long-term climate risks and the challenges of coordinating collective action, can be addressed through complementary levers across the governance chain. Climate cooperative initiatives can mobilise and coordinate voluntary action, while regulators are positioned to correct market failures and establish effective incentives through targeted interventions.

To repair the broken climate governance chain, all actors must activate the levers within their discretion to overcome structural barriers, coordinate ambition and enforce accountability. To support that effort, this report examines the limitations of current climate governance in the financial sector and explores how financial institutions, climate cooperative initiatives and regulators can better align their actions with the goals of the Paris Agreement. It maps the key levers available to each actor, highlights where these remain underdeveloped, and provides a structured framework for action, ranging from minimum to high-ambition strategies, to guide more effective climate governance.

On 2 July 2025, the European Commission presented its proposal for an EU climate target for 2040. The proposal included the potential use of international carbon credits under Article 6 of the Paris Agreement. This policy brief outlined the conditions that should be met if any international carbon credits are to count towards the EU’s 2040 climate target. These recommended conditions were designed to ensure that the use of international carbon credits strengthens, rather than weakens, EU climate action, while maintaining the EU’s alignment with the core principles of the Paris Agreement.

Article 6 is the backbone of international carbon trading under the Paris Agreement. If utilised responsibly, Article 6 could be one of the greatest opportunities to drive additional climate mitigation and improve climate resilience. However, evidence so far shows that this potential is at risk, and the framework could instead enable the ‘greenwashing’ of climate commitments by countries and corporate entities alike.

The new ‘Oxford Principles for Responsible Engagement with Article 6’ – developed by a wide range of researchers and practitioners from Oxford and beyond – provide essential guidance and guardrails to enable this international framework to be used in a responsible manner.

The current international rules established under Articles 6.2 and 6.4 create a floor rather than a ceiling of integrity, leaving considerable discretion to the user as to how to act responsibly. The goal of the 'Oxford Principles for Article 6' is to foster international carbon markets that drive genuine climate action and provide incentives to enhance ambition as opposed to serving as a smokescreen for inaction.

The document expands on three core Principles and specific criteria that must be implemented to achieve these principles.

• Principle One: Ensure that the Use of Mitigation Outcomes is Aligned with the Paris Agreement
• Principle Two: Ensure Mitigation Outcomes have Climate Integrity and Uphold Social and Environmental Safeguards
• Principle Three: Ensure Robust Accounting and Transparent Engagement with Article

The Oxford Principles for Article 6 build on the San José Principles to promote high ambition and integrity in international carbon markets. They do not displace existing rules and guidance on Articles 6.2 and 6.4, but instead bolster these as necessary.

Cooperative Climate Initiatives (CCIs) play a critical role in achieving the Paris climate goals, and their numbers have steadily increased in recent years. However, significant integrity concerns remain. Our assessment of 267 CCIs launched at the past three COPs and recognized by the UNFCCC highlights three main issues. First, while CCIs make numerous commitments, implementation often falls short. Second, accountability and transparency gaps persist, with many initiatives lacking monitoring frameworks and sufficient transparency for accountability. Third, CCIs primarily benefit Global North countries, underscoring the need to engage local stakeholders and create tangible benefits in underrepresented regions such as the Central and West Asia region (including Azerbaijan) and developing nations. In response, this policy brief offers recommendations, particularly for the COP 29 and 30 presidencies, but also climate action orchestrators, and CCIs to promote higher integrity:

• Stakeholders and orchestrators, including UN-affiliated campaigns, should enhance transparency, accountability, and inclusiveness in CCIs.
• The COP presidency should encourage greater participation from local businesses, investors, and cities, particularly in the Central and West Asia region (including Azerbaijan), also beyond COP29.
• CCIs should address broader environmental and social issues, including biodiversity loss, desertification, and environmental justice

This document presents results from the application of version 3.0 of a methodology, developed by Oeko-Institut, World Wildlife Fund (WWF-US) and Environmental Defense Fund (EDF), for assessing the quality of carbon credits. The methodology is applied by Oeko-Institut with support by Carbon Limits, Greenhouse Gas Management Institute (GHGMI), INFRAS, Stockholm Environment Institute, and individual carbon market experts. This document evaluates one specific criterion or sub-criterion with respect to a specific carbon crediting program, project type, quantification methodology and/or host country, as specified in the below table. Please note that the CCQI website Site terms and Privacy Policy apply with respect to any use of the information provided in this document. Further information on the project and the methodology can be found here: www.carboncreditquality.org. The preparation of this document was funded through the European Union’s HORIZON EUROPE Research and Innovation Programme under grant agreement number 101137625 (ACHIEVE).