Many private sector actors lack the capacity needed to understand or use climate information and to integrate climate risk management into their business operations.
Businesses and investors are key drivers of adaptation, with many private sector actors already taking action by strengthening business and supply chain resilience.
9 July 2019: The National Adaptation Plan (NAP) Global Network hosted a summit to help developing countries engage the private sector in their efforts to respond to the impacts of climate change. In preparation for the summit, the NAP Global Network published five blog posts on engaging with the private sector.
The ‘NAP Global Network’s Peer Learning Summit,’ which convened in Rotterdam, the Netherlands, from 9-11 July 2019, sought to foster public-private partnerships (PPPs) through South-South peer learning and exchanges among countries on engaging the private sector in their NAP processes, with a focus on micro, small and medium-sized enterprises (MSMEs) in the agriculture and tourism sectors.
The event emphasized the importance of NAP processes for countries to build their resilience to climate threats, in addition to reducing emissions. It also underscored that businesses and investors are key drivers of adaptation, with many private sector actors already taking action on adaptation by strengthening business and supply chain resilience and developing goods and services to adapt to climate change.
Representatives from Ghana, Saint Lucia, Rwanda, Morocco, Viet Nam, Brazil, Colombia, Jamaica, Côte d’Ivoire, Kenya, Sierra Leone and Jordan attended the meeting, as did representatives of bilateral development partner agencies and international climate support initiatives.
Direct losses from natural disasters between 1998 and 2017 cost more than USD 2.9 trillion.
In advance of the Summit, the NAP Global Network outlined options for private sector engagement in a series of blog posts.
The post titled, ‘What is the Business Case for Private Investment in the NAP Process?’ highlights that direct losses from natural disasters between 1998 and 2017 cost more than USD 2.9 trillion, 77% of which were climate-related, and in 2018 alone, natural disasters caused more than USD 225 billion in economic damages. It notes that many companies have initiated support for and investments in adaptation through, for example, the NAP process to: manage risks for business continuity and reputation; capitalize on new markets and business opportunities; and comply with policies, regulations and investors’ interests.
The post titled, ‘Knowledge is Power: Why Information Sharing is Key to Engaging Businesses in the NAP Process,’ notes that private sector actors often do not invest in adaptation because they lack information on climate change. It states that companies and investors must have a more detailed understanding of what climate change is, how it may impact their operations, and what options are available to increase their adaptive capacities. The blog post emphasizes the role of governments in ensuring that private companies understand the climate challenge.
The blog post titled, ‘Paying for It: How Governments Can Help the Private Sector Overcome Financial Barriers to Investing in Adaptation,’ underscores that private sector actors must have access to reliable financing to pay for adaptation actions and that appropriate financial instruments must be available. Highlighting access challenges, the article stresses that enabling access to finance should be central to the NAP planning and implementation process.
A blog post on MSMEs addresses ‘How Institutional Arrangements Can Engage Small Businesses in Climate Adaptation.’ It explains that MSMEs account for 60% of employment in developing countries. It discusses the need for governments to ensure that the right enabling conditions are in place for successful engagement of MSMEs in the adaptation planning process, and stability in domestic laws, policies and regulations. It also calls for open dialogue and collaboration with MSMEs, and states that MSME support for adaptation will help protect and create the jobs, goods and services necessary to meet the climate crisis.
A blog post titled, ‘When Life Gives You Lemons: How to Bolster Businesses’ Capacity for Making Lemonade Out of a Changing Cclimate,’ addresses capacity building as a key enabling factor to private sector engagement in the NAP process and the need for governments to work in tandem with civil society actors, development partners, academia and businesses to identify and address capacity gaps. It notes that: many private sector actors lack the capacity needed to understand or use climate information and to integrate climate risk management into their business operations; businesses and individuals may need to build their technological capacities; and support may be needed to develop business models to bring adaptation products and services to market or to implement business strategies that can reduce businesses’ exposure to climate risk. The blog post notes that governments, through the NAP process, can: develop and deliver training or outreach programmes; offer guidance notes or training on ways to measure returns on climate change adaptation investments; help translate risk assessments into responsible management plans and concrete actions; and ensure that the private sector has access to adaptation decision-making support tools. [NAP Global Network Press Release] [Summit Website] [Guidance Note on Engaging the Private Sector in NAP Processes]