As COP29 Begins, CGS Announces Release of “Unlocking the Power of Small Businesses to Drive Climate-Smart Inclusive Growth”
Today, we are honored to share the release of “Unlocking the Power of Small Businesses to Drive Climate-Smart Inclusive Growth,” a report CGS carried out with the support of the Mastercard Center for Inclusive Growth.
Small businesses must play a crucial role in solving climate change. They are key drivers of economic output globally and within local communities. Yet, they are disproportionately vulnerable to the impacts of climate change and face unique challenges in accessing emerging opportunities within the green economy. Globally, the 270 million micro and small enterprises (MSEs[1]) are 90% of all businesses, generate over 50% of global GDP, and employ 70% of the world’s workforce. MSEs make up a significant portion of large corporations’ supply chains. Often viewed as engine rooms of ingenuity and innovation, they can play a major role in addressing today's sustainability and social challenges. The Mastercard Impact Fund has deployed $432 million to organizations working with small businesses and local communities to advance inclusive growth–economic growth that benefits all segments of society, in 104 countries to date. Many of those organizations working with small businesses have said that climate change is a growing priority, already surfacing as a risk, an opportunity, or both. We must urgently reduce the climate risks facing MSEs, as well as accelerate their ability to deliver climate solutions.
To that end, Christensen Global partnered with the Center to mobilize new efforts to reduce climate-related risks and activate climate-related opportunities for MSE. This includes the report we released today, “Unlocking the Power of Small Businesses to Drive Climate-Smart Inclusive Growth,” as well as convenings to engage and drive action from its recommendations. The report seeks to add to the evidence base for the importance of MSEs as climate solutions providers, to bring attention to the strategies that are successful in doing so, and to drive resources to support small businesses tackling climate change around the world.
Based upon our desk research, interviews and roundtable discussions with those working with MSEs, the report finds that data, capital and wrap-around support are key solutions to unlock the power of MSEs to accelerate climate-smart inclusive growth, underpinned by digital financial access, including:
Data to minimize risk and to enable MSEs to tap into new market opportunities;
Capital to address climate risk, such as adequate and affordable insurance, and to access climate solutions opportunities (e.g., de-risking tools, affordable credit and debt, carbon finance); and
Wrap-around support to MSEs, such as training, digital financial inclusion, or market access tools.
We feature specific case studies that have already delivered these solutions for people and the planet around the world - from Idaho to Ghana. With some leveraging data or capital or wrap-around support one at a time, but often activating multiple of these, such as bringing data to bear to make insurance affordable or accessing capital to deliver climate mitigation and adaptation simultaneously, such as by improving agricultural practices which deliver soil health and therefore increased resilience and carbon sequestration for climate mitigation.
We are launching the report at the start of the UN Framework Convention on Climate Change (UNFCCC) 29th Conference of the Parties (COP29) held in Baku, Azerbaijan. COP29 has overarching priorities which include delivering on climate finance, transitioning to clean energy, prioritizing nature, people and livelihoods, especially for the most vulnerable, as well as ensuring inclusivity in decisions and discussions, especially Indigenous Peoples and local communities. Within that context, our goals for advancing MSEs as climate solutions providers include advancing the recognition by leaders across sectors that MSEs must be prioritized to deliver on global climate goals for climate mitigation and adaptation and sparking alignment of resources, policies and programs behind MSEs as climate solutions providers.
From my own experience of advancing climate solutions and sustainable development for over three decades, it is clear that we urgently need micro and small enterprises as partners to deliver climate-resilient and equitable economic prosperity and opportunity. A particular joy for me was the chance to learn about and feature case studies of those already doing this work, initiatives that we hope will be supported and replicated and that we know you will enjoy learning about to inspire your efforts for a more resilient world.
As we state in the report, “Those of us working to advance climate solutions must prioritize MSEs in our strategies, and those in inclusive economic development need to bring a climate lens to our work, addressing the risks and opportunities climate change poses to our efforts. Let us each, as philanthropists, investors, service providers, NGOs, corporations and governments, come together to resource, scale and replicate solutions with urgency to prepare MSEs for climate impacts and enable them to be agents of climate-smart inclusive growth.”
Finally, I would like to thank my CGS colleagues, Sara Lichtenberg, Scott Lewis, Pamela Wellner and Eliza Spain, for their collaboration in producing this report, and my Mastercard colleagues, Shamina Singh, Ellen Jackowski, David Eichberg and the Mastercard Center for Inclusive Growth Insights Team, Ali Schmidt-Fellner, Carolina Zuluaga, Mycala Gill, as well as the entire production team, especially Hayden Harrison and Valeria Huerta.
[1] According to the OECD, micro enterprises have fewer than 10 employees and small enterprises range from 10 to 49 employees. OECD website, Enterprises by business size.
