Why and How to Get Small Businesses into Climate Change Resilience

According to a piece published on the World Resources Institute’s blog, “one of the biggest outcomes of the recent UN Climate Summit came from the private sector, where, side by side with world leaders, 1,042 multinational corporations (MNCs) pledged their support for carbon pricing.”

While this move is significant, because MNCs play an integral role in planning for the impacts of climate change, the article notes that “if they are not already doing so, business leaders can go a step further by also making their supply chains – often made up of small businesses in developing countries – more resilient.”

Calling micro-businesses and small businesses the “economic engines,” the WRI piece says that by ensuring the entire private sector is able to adapt to climate change, the resilience of populations everywhere can be supported.

So why do small businesses matter when it comes to climate change adaptation? According to the WRI, there are three main reasons.

3 Reasons

1) “Small businesses are best suited to reach vulnerable communities in low-income countries.” – In developing countries, where there are populations vulnerable to climate change effects, small businesses often make up the majority of employment opportunities. People rely on small businesses for their livelihoods.

2) “If small businesses are resilient, so are communities.” – Small businesses and micro-businesses can create resilience in communities by offering resilient solutions to problems or resilient products. For example, the WRI explains, Cambodian farmers learned new techniques to increase the yields of their crops while dealing with scarce resources. Another example is switching from selling corn or maize to selling drought-resistant cassava in areas where drought is a common problem.

3) “Vulnerable populations have the fewest resources to adapt to climate change.” – Vulnerable populations in developing countries often are dependent on natural resources, but those resources may not be plentiful and even if they are now, they are under threat because of climate change. In Africa, the WRI says, “at least 80 percent of the rural poor derive their primary income from employment in small businesses in agriculture, a sector highly susceptible to climate change because of its reliance on natural resources.” By developing resilience in these kinds of small businesses, adopting risk management plans and taking seriously the impacts of climate change, these communities can increase their own levels of resilience.

So how do we create resilient small businesses?

Those linked to MNCs might be supported by the MNCs themselves. However, micro-businesses and small businesses without such connections will also require support to strengthen their resilience. According to the WRI piece, this means that “the public sector becomes an important player in implementing policies and providing financial resources, incentives and support to help small businesses to adapt to climate change.”

The Vulnerability and Adaptation team at WRI is now researching the how of this situation – how can the private sector (including small businesses) help create climate-resilient communities? What are the methods they can adopt to build this resilience? The team’s research will be released in 2015.

 

For more information, see the original article here: http://www.wri.org/blog/2014/10/3-reasons-small-businesses-must-play-large-role-climate-change-resilience