Extreme weather events have significantly affected the businesses of nearly half of all executives polled in a survey in Africa and South Asia.
Adapting to the physical risks associated with climate change is also slightly more of a concern to the private sector in emerging economies than transitioning to a lower carbon world, according to a survey that the United Kingdom's development finance institution, CDC Group, conducted among its investees.
It found that 78% of respondents said that their businesses were taking or planning action to identify physical climate risks, while 70% said the same for transition risks associated with moving to a low-carbon world, such as policy changes, reputation, and market changes.
“I think physical risk is more real because people have experienced it before, they can see it and they can feel it,” Judith Munyurwa, CEO at Zebu Investments, told the survey.
Just under half of respondents said extreme weather — most commonly drought or heavy rain — had disrupted their business, and around 40% were taking steps to reduce their vulnerability to physical climate risks.
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In one case cited in the survey, extreme weather interfered with a climate mitigation project, when heavy rains washed away roads to a wind farm being constructed in Pakistan. The company’s executive said “urban flooding is also causing absenteeism among staff at our textile factories.”
A similar problem was reported by an executive in Kenya, who said that staff were unable to go into work during floods and that productivity consequently fell.
Climate finance to help lower-income countries meet the challenges brought about by climate change has yet to reach the annual $100 billion promised by the international community in 2009 — a target that is now a year overdue. The money earmarked for adaptation — as opposed to mitigation — is lagging even further. But the survey indicates that physical climate risks are already harming economies.
Survey respondents said they believed more investment was needed to help businesses in emerging economies transition to net-zero carbon emissions and become resilient to climate shocks. Training, technical assistance, and investment in climate-focused funds and companies were all cited as examples of how this could be done.
This coverage exploring innovative finance solutions and how they enable a more sustainable future, is presented by the European Investment Bank.
About the author
William Worley@willrworley
Will Worley is the Climate Correspondent for Devex, covering the intersection of development and climate change. He previously worked as UK Correspondent, reporting on the FCDO and British aid policy during a time of seismic reforms. Will’s extensive reporting on the UK aid cuts saw him shortlisted for ‘Specialist Journalist of the Year’ in 2021 by the British Journalism Awards. He can be reached at william.worley@devex.com.
