The latest emissions reduction pledges submitted ahead of the November 2025 UN Climate Change Conference (COP30) are unlikely to meet the goals outlined in the Paris Agreement, potentially affecting a broad range of industries, according to a recent report by Moody’s Ratings.
The report points to ongoing delays in meeting existing climate targets and notes a growing shift among governments toward investing in climate adaptation and resilience, rather than solely focusing on mitigation.
While the updated Nationally Determined Contributions (NDCs) call for steeper emissions cuts, the commitments differ in terms of conditionality, sectoral coverage, and methods of measurement. Major economies including China, the European Union, and India are expected to release revised pledges featuring more ambitious targets and diversified decarbonization strategies, even as global policy uncertainties continue to complicate implementation.
Beyond the traditional focus on electrification, many governments are expanding their efforts to include sectors such as agriculture, energy efficiency, and waste management. According to Moody’s, this broader approach reflects the limitations of electrification alone and could carry important credit implications for industries linked to these sectors.
Several NDCs place greater emphasis on reducing emissions from agriculture, forestry, and land use—areas often overlooked in past climate strategies. Energy efficiency in buildings and improved waste management also emerge as priority areas in the push for decarbonization.
For emerging markets, success in meeting climate goals remains closely tied to the availability of external financing. Without adequate funding, efforts to scale up resilient infrastructure and support low-carbon transitions in vulnerable communities could stall.
“Countries facing high exposure to physical climate risks but lacking sufficient investment in adaptation and resilience are more vulnerable to economic shocks and weakening credit fundamentals,” Moody’s noted.
The report further warns of a potential “climate investment trap,” referenced in several NDCs, where recurring climate-related disasters deepen debt burdens and restrict a country’s capacity to invest in future adaptation.
