Climate change poses increasing risks to economic growth and development efforts across the world, particularly in developing countries. Responding and adapting to these risks will require concerted efforts from all actors in society: individuals, civil society, government as well as businesses. Yet, little is known about how businesses in developing countries manage climate risks and about how adaptation to extreme weather events and climate change can be supported and facilitated through government action to create a supportive business environment.
This is a critical gap, as the private sector plays a fundamental role in the growth of developing countries and makes an important contribution to livelihoods. In Africa, the private sector generates two thirds of the continent’s investment, 75% of its economic output and 90% of its formal and informal employment. But climate change poses serious risks to businesses, either directly by damaging infrastructure and disrupting production processes, or indirectly by disrupting supply chains and leading to changes in regulation, product demand and business reputation.
In an advanced review recently published by WIREs Climate Change, Florence Crick and colleagues review two separate academic literatures – one on business adaptation to climate change and one on enabling environments for private sector development – to identify the key factors required to provide an enabling environment for business adaptation. They do this with a focus on adaptation by small and medium enterprises in sub-Saharan Africa.
The authors develop a framework portraying the key ‘building blocks’ needed to support business adaptation to climate change. This framework can have multiple uses. It can serve as an assessment tool to evaluate enabling environments for business adaptation within and across countries and it can support developing country governments, international agencies and donors in the definition of policy and intervention priorities. This review reveals the need for a more holistic approach to developing enabling environments for business adaptation: one which addresses the broader structural deficits that condition vulnerability and the more specific barriers that limit business adaptive capacity.
Kindly contributed by Kate Gannon and Florence Crick.