Climate change is a clear threat to societies around the world, with short and long-term impacts on their livelihoods. Many put the blame on governments to deliver on lofty climate goals. But government commitments can and should be supported by the engagement and tangible actions of the private sector.
Climate change is being recognized as a serious development challenge and even though we are far from avoiding potential catastrophic events, much has been accomplished. Scientists have reached an agreement about climate change and its impacts. We’ve also seen the creation of several significant climate funds, as well as a steady increase in policy and financial support for climate-friendly technologies.In one critical aspect, however, we need more progress which is making the private sector a partner in helping nations build resilience and adapt to climate change.
The business community needs to be our partner as we build resilience against and adapt to climate change. Yet to date, adaptation discussions inside and outside official climate negotiations have had little business engagement.In some quarters, business interest has even been viewed as inappropriate competition for scarce resources. The focus thus far has been almost entirely on what governments need to do, and who should pay. This view is slowly changing in a few countries but not in developing ones where the biggest needs lie.
Engaging the private sector brings about many benefits. It can mobilise financial resources and technical capabilities, leverage the efforts of governments, engage civil society and community efforts, and develop innovative climate services and adaptation technologies. Private sectors dominate many investments that are critical to adaptation and the design and delivery of many adaptation services.Highly innovative technology and services developed and marketed by private companies are already improving climate resilience.
By adapting its own operations and assets to climate change the private sector can ensure business continuity and protect those who depend on private jobs or infrastructures. Through this, and by providing funding and products and services for resilience, private entities contribute to achieving the Sustainable Development Goals (SDGs) and the targets laid out in existing Nationally Determined Contributions (NDCs).
Efforts to engage the private sector in adaptation to climate change are beginning and must be accelerated. Public policy should provide appropriate incentives for adaptation measures and, where necessary, regulation to avoid shifting risks to the public.The financial community can help by recognizing the relevance of climate risk as a factor when it evaluates the expected future performance of companies, for example by offering climate leaders a financial premium.