Making climate action everyone’s business 

Climate variability and change constitute a major threat to national development and the growth of small and medium scale enterprises in particular.

Humans are able to thrive in a wide range of climate conditions, but we also know that climatic factors, and climate extremes, can have a strong bearing on economic performance. Understanding and managing the link between climate and the economy is therefore an important facet of economic development

The urgency to take transformative action to avoid the worst effects of climate change are in plain evidence in the recent findings of the Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5°C, published on 8 October 2018.

The Intergovernmental Panel on Climate Change (IPCC), which includes more than 1,300 scientists, forecast the following: Temperature rise of 1-5 degrees, Changes in rainfall pattern, More droughts and heatwave, Stronger hurricanes and cyclones, Sea levels will rise by 1-4 feet, Artic will likely be ice free in the next 100 years.

 

The effect of climate change is being experienced by all facets of life and in all the major sectors of the Ghanaian economy. Disasters such as floods, rainstorms and strong winds are becoming more frequent than before. Many places have seen changes in rainfall, resulting in more floods, droughts, or intense rain, as well as more frequent and severe heat waves.

 

Addressing climate change issues in Ghana has gained traction in the agricultural sector. However, businesses and industry have also been noted to be significantly affected by climate change.

 

At ICC’s Centenary Summit in May, International Chamber of Commerce (ICC) issued a Declaration setting out a vision to shape the future of global business for the next century. The Declaration includes an endorsement of the IPCC Special Report on Global Warming of 1.5°C and commits International Chamber of Commerce (ICC) to work towards mobilising business behind the 1.5°C target and net-zero emissions by 2050.

 

In line with this commitment, ICC is undertaking a number of efforts to help bolster climate action by business. One such action is the Chambers Climate Coalition pledge which was launched at the 11th World Chambers Congress in Rio de Janeiro . By signing the pledge, chamber leaders around the world commit to take bold climate action.

That is why the International Chamber of Commerce (ICC)—in its capacity as the UNFCCC Focal Point for business and industry—is calling on all governments to do their part to ensure that we meet the goals of the Paris Agreement. An important step in this regard was delivering the Paris Rulebook at COP24.

Paris Rulebook: While more companies are committing to leadership on climate action than at any other time in history, implementing the Paris Agreement would provide greater certainty on long-term climate policies and required investments, thus allowing businesses to increase their investments in innovation, research, infrastructure, and new technologies and solutions that will be essential to achieving the emission targets and ambitions of the Paris Agreement.

Adaptation, resilience and capacity building: Business sees the urgency of responding to the impacts of climate change that are already being felt and preparing for the future effects of climate change. Business is responding by developing technologies, products and services to adapt to the effects of climate change and by building resilience into business operations, supply chains, policies and risk management strategies. Business can be a key partner for adaptation and resilience planning, including for knowledge-sharing; modelling; research; technology development and transfer; finance; insurance; capacity building and public-private partnerships.

Global Stocktake: The Global Stocktake must enable a full review of the progress of the Paris Agreement. The Global Stocktake should be carried out by an external body that will develop a technical assessment of progress based on cited references. This should then be reviewed by all Parties to the Paris Agreement, leading to the development of a summary for policymakers, which will help to inform future Nationally Determined Contributions (NDCs), which each Party is required to prepare, communicate and maintain under Article 4.2. Input from non-Party stakeholders must be encouraged as part of the primary technical assessment process.

Mitigation (Decision 1/ CP.21): Business strongly supports the development of guidance on the features of NDCs. It is essential that NDCs are clear, transparent and understandable to enable the private sector to evaluate and manage their current and future investments. Business can contribute in this regard and help in the elaboration, assessment, improvement and implementation of NDCs. Common timeframes for NDCs should be strongly considered to assist planning, promote greater ambition and enhance the Global Stocktakes.

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Transparency: The objective of the Transparency Framework must be regular, clear and comprehensive reporting and accounting linked with technical expert review. Some flexibility will be necessary for certain developing countries. It is essential that the Transparency Framework enables the tracking of progress on NDCs. Overlaps between the UNFCCC’s existing measurement, reporting and verification (MRV) system must be minimised to prevent “double-reporting” being required.

Response Measures— Just transition and decent jobs: The Paris Agreement takes into account the imperative of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally-defined development priorities. In fulfilling these responsibilities, the optimum outcome will be achieved by effective engagement with business to ensure that policy decisions are tailored to country-specific, sector-specific circumstances, including the skills and re-skilling needed for a green economy. There is no single policy template that can be applied in all circumstances. Just transition and decent jobs should be recognised in the NDCs.

Technology Mechanism Assessment: The current UNFCCC technology instruments for adaptation and mitigation of climate change should be expanded and developed further to achieve closer linkage of NDCs and technology needs assessments, develop more practical technology action plans and engage national designated entities more strongly on a global level.

 

Climate Finance (Article 9): The mitigation and adaptation strategies necessary to transition to a low-carbon economy and manage the impacts of climate change will require access to finance beyond ‘business as usual’. The private sector is a key partner in the development of the cooperative model proposed in Article 9 of the Paris Agreement. It will be necessary to design mechanisms to de-risk flows of private capital into climate change adaptation and mitigation investment opportunities, particularly in developing countries.

Market and non-market based approaches (Article 6): Business strongly supports the use of international market-based approaches and calls on Parties to complete guidance on Article 6 of the Paris Agreement through the Paris Rulebook. Business stands ready to inform the process of identifying the best ways forward to build-up a framework for Article 6. ICC’s recommendations are outlined in “Business Views on Market Mechanisms—Articles 6(1) to 6(7) of the Paris Agreement” and include:

  • Building a framework for MRV of emissions that takes into consideration generally accepted existing international and national MRV frameworks1 and that is linked to the transparency framework being developed under Article 13 of the Paris Agreement.
  • Creating ambition and predictability by developing comparable and measurable standards for emission reduction for NDC reviews so as to allow evaluation of mitigation actions, raise ambition and understand and avoid impacts such as carbon leakage.
  • Consulting with experts of specific economic activities to establish further global emission reduction approaches on a sectoral basis.
  • The rules must be clear and flexible to incentivise business participation while protecting environmental integrity and avoiding double-counting/ claiming.
  • Transaction costs must be minimised to encourage the involvement of small and medium-sized enterprises.
  • It is essential that Article 6 takes into account learnings from the Clean Development Mechanism and Joint Implementation.


 As we prepare for key milestone events, including the United Nations Secretary-General’s Climate Action Summit which will take place in New York this September, and COP25, which will take place in Santiago, Chile this December, ICC has been calling for greater climate ambition from both business and government – Climate action is everyone’s business.

Indeed, Ghana’s Nationally Determined Contribution (NDC) under the Paris Agreement on Climate Change indicates that the long-term goal of Ghana’s adaptation is to increase climate resilience and decrease vulnerability for enhanced sustainable development. One key policy area of the National Climate Change Policy of Ghana is disaster preparedness and response as a result of the need to ensure resilience for all facets of the sectors of the economy.

Climate change has the potential to cost small business owners millions in damages, yet there is little knowledge on how small businesses are coping with the impacts of climate change. Micro, small and medium enterprises (MSMEs) are particularly vulnerable because of their more limited capacities to absorb disaster losses.

 

ICC Ghana with the support of the BUSAC Fund is undertaking an advocacy action to create awareness on Climate Change and coping strategies for SME’s.

The purpose of the advocacy action is to create greater awareness of the menace of climate change  and make this top of mind among the general public.

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Indeed ICC Ghana recognises that mitigation and adaptation actions require the collective effort of government, the private sector and society.

Some popular recommendation include each citizen to plant a tree and a ban on single use plastic e.g. sachet water & plastic bag for packaging and shopping

 

The objectives of the advocacy action include:

 

1.      Identify adaptation measures and disaster preparedness activities by businesses to address climate risks.

 

2.      Evaluate the effectiveness of government  programmes that assisted in post-disaster.

 

3.      Encourage government to provide the necessary framework for capacity building and awareness raising for businesses to incorporate mitigation and adaptation measures and develop the necessary climate strategies.

 

 

The private sector’s role in developing countries can help communities become resilient to climate change. In most countries, the private sector generates more than 60 percent of gross domestic product, and micro and small enterprises (MSEs) in developing countries provide around 60 percent of all jobs.  Many of these jobs are in the agriculture sector, which is especially vulnerable to extreme weather changes. Moreover, since billions of people rely on SMEs for their livelihoods, supporting this economic segment is crucial to help communities adapt to climate change.

SMEs typically lack adequate resources to access information needed to guide their decision-making under new climate conditions, but targeted weather and climate information can help them understand particular business risks and opportunities. For example, businesses in rural communities can benefit greatly from early warning systems

SMEs have the opportunity to provide products and services to meet consumer demand in a changing climate.  Finding and producing products and services that help consumers build resilience, plus finding ways to better access new markets in general, can greatly help SMEs become more resilient and prosperous.

More companies than ever before are taking transformative climate action and the reason is simple: climate change is everyone’s business. A failure to mitigate the impacts of climate change would wreak catastrophic damage on things we all share —our common planet and the prospects for future generations.

 

Coping Strategies for SMEs In Dealing with Climate Change

 

Harnessing the private sector’s role in developing countries can help communities become resilient to climate change. In most countries, the private sector generates more than 60 percent of gross domestic product, and micro and small enterprises (MSEs) in developing countries provide around 60 percent of all jobs.  Many of these jobs are in the agriculture sector, which is especially vulnerable to extreme weather changes. Moreover, since billions of people rely on MSEs for their livelihoods, supporting this economic segment is crucial to help communities adapt to climate change.

For SMEs to deal with the adverse effect of climate change the following coping and adaption mechanisms are recommended by ICC Ghana.

 

  • Business-relevant climate information and risk analysis

SMEs typically lack adequate resources to access information needed to guide their decision-making under new climate conditions, but targeted weather and climate information can help them understand particular business risks and opportunities. For example, businesses in rural communities can benefit greatly from early warning systems, such as floods, droughts, tidal waves etc.

 

  • Technical assistance and training

The public sector can help SMEs through sharing information, conducting research and development, and building skills to understand adaptation options that help their businesses become more resilient.

  • Government policies enabling adaptation investments

Governments can integrate adaptation into their development planning across agencies to conserve resources, improve productivity, and strengthen community resilience, with far-ranging impacts for the SMEs or example as done in the Nationally Determined Contributions of Ghana.

  • Market and business development

SMEs have the opportunity to provide products and services to meet consumer demand in a changing climate.  Finding and producing products and services that help consumers build resilience, plus finding ways to better access new markets in general, can greatly help SMEs become more resilient and prosperous.

  • Partnerships and cooperatives

Partnering with other businesses or public entities is a cost-effective way for MSEs to overcome having limited resources to invest in adaptation. This can enable them to pool resources and funding and to self-insure against weather-related shocks.

  • The use of insurance in the event of mitigate losses

Another mechanism that SMEs can employ to mitigate the impact of climate change on their business is the use of insurance.

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