Welcome back. A day behind schedule, and after two weeks of negotiations, more than 190 nations reached a deal at the United Nations summit in Glasgow. Supporters say it signals new determination among the world’s governments to shift away from fossil fuels. But it lacks an enforcement mechanism, relying instead on the good faith of the world’s governments. 

The deal struck at the COP26 summit in Scotland asks governments to strengthen their emissions-reduction targets by the end of next year to keep them in line with the Paris accord objective of keeping global warming close to 1.5 degrees. Governments had failed to agree to cuts sufficient to hit that target ahead of the summit. The big question now is how to get the U.S., China and other big emitters to back even sharper emissions cuts when they have just updated their climate plans within the last year.

The deal leaves unresolved how wealthy nations will provide a big increase in funding in the coming years for poorer nations to adopt renewable energy and protect themselves from the effects of global warming. Rich countries have so far failed to meet a promise to provide $100 billion a year of climate funding. 

Under the rules of the U.N. process, the texts had to be approved unanimously. They “reflect the interests, the conditions, the contradictions and the state of political will in the world today," said U.S. Secretary-General António Guterres. He said the deal makes important steps forward “but unfortunately the collective political will was not enough to overcome some deep contradictions.”

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Better late than never. It wasn't the most delayed finish for a U.N. climate conference. COP25, held two years ago in Madrid, ran into Sunday as negotiators failed to wrap up the carbon trading rulebook. But COP26 kept negotiators at work until Saturday evening before they agreed to sign off on the final version of the text.  

The finished article. A key piece of unfinished business from the Paris accord was Article 6, the section of the treaty that called for the creation of an international system for accounting for and trading in greenhouse-gas emissions. Those rules were agreed in Glasgow. Kelley Kizzier, a carbon market expert at the nonprofit Environmental Defense Fund, said the agreement isn't perfect, but “provides the rules necessary for a robust, transparent and accountable carbon market.”

Down, but not out. An early draft of the agreement called on companies to “accelerate…the phasing out of coal and subsidies for fossil fuels.” As the text was revised, qualifiers were introduced, and after the final intervention it referred merely to “the phase down of unabated coal power” and a vaguer reference to “inefficient” fossil fuel subsidies. Nevertheless, the addition of the language on coal and fossil fuels marked a shift from previous U.N. climate agreements, and a win for the bloc of developed nations that pushed for the change. 

Loss and damage. A point of contention during the negotiations was “loss and damage”—a reference to climate impacts that are impossible to alleviate. Developing countries hard-hit by climate change wanted the text to include a plan to set up a dedicated funding mechanism that would enable rich countries to compensate them for the harm. They didn’t get it, to the anger of many delegates who spoke up in the closing session in Glasgow. 

Parallel lines. While the official U.N. negotiations continued, a series of voluntary deals were announced over the fortnight by groupings of companies and countries. The biggest surprise was an announcement that the U.S. and China would cooperate on climate, but there were a multitude of pledges, ranging from scaling up private finance to tackling deforestation. Some got more traction than others. Truck maker Scania endorsed a pledge to slash emissions from the logistics sector. “Was I surprised that there were not more of our peers signing up? Yes, I was, to be honest,” said the company's chief executive, Christian Levin. 

Business time. As well as a political talking shop, COP26 functioned as a giant trade show that gave executives an opportunity to discuss the climate agenda with their peers. Some business leaders said they were struck by the feeling of common purpose, even as they acknowledged the tough political challenges that were mirrored in the deal text itself. “I am convinced more than ever that leading in this regard is a huge economic advantage for those who choose to do so,” said Ralph Izzo, chief executive of New Jersey energy company Public Service Enterprise Group. 

This is the last daily update on COP26 from the Sustainable Business newsletter. You can continue to follow our climate coverage in The Wall Street Journal and in this newsletter, back Thursday. Thanks for reading.