Opportunities for Private Sector Engagement in Urban Climate Change Resilience Building
A report that explores the opportunities for the private sector to build the resilience of the urban poor to the impacts of climate change. It analyses 9 sectors and includes 4 case studies (Asian cities), developing potential business responses for each case.
Global rise in temperature has been steep in the last 50 years, leading to increased climatic variability. This variability manifests itself in various ways including through unpredictable rainfall patterns, increased flooding, depleting agricultural output and rising sea-levels. Although efforts are in place to reduce greenhouse gas emissions and mitigate future rise in temperature, responding to the inevitable impacts of climate change that we are already witnessing has received relatively less attention.
The poor are typically the most vulnerable in the face of climate change, as they are highly exposed to the environment through their living conditions and livelihoods. Those in Asian cities are especially susceptible to unpredictable environmental changes, as these cities are expected to account for more than 60% of global population growth in the next 30 years. Tier two cities in particular lack the resources and infrastructure of larger, more developed cities to be able to address the compounding challenges of urbanisation, poverty and environmental degradation, leading to an escalation in the vulnerabilities of the urban poor.
Thus, measures that help the urban poor in Asian cities adapt to the changing climate and build their resilience and capacity to respond dynamically to its adverse impacts, are essential, and call for attention, funding and action from civil society, the public and private sectors. Private sector engagement in Urban Climate Change Resilience Building (UCCRB) is particularly important, as the need is vast, and grant funding from governments and donors is limited.
To the extent that there are unmet market needs, opportunities for private enterprises exist. Yet, while businesses are actively engaging in climate-proofing their supply chains and operations, and in responding to infrastructure building opportunities initiated by the public sector or civil society, very few investments in businesses that build resilience have been made. Private sector interest in ensuring business continuity, by protecting owned infrastructure and preparing for market disruptions, and in capitalising on revenue generating opportunities presented by other actors is clear. However, understanding of and thus interest in market-based solutions to build resilience is under-developed. The Rockefeller Foundation and Intellecap thus set out to identify business opportunities in UCCRB, and to understand the drivers and inhibitors to private sector participation.
In an effort to put boundaries around the scope of this study, we defined business opportunity as potential for private sector engagement in UCCRB with the intent to respond to a market need for products or services. To this end, partnership with civil society organisations and public-private partnerships (PPPs) were considered only if initiated by the private sector. Business response to public tenders, technical assistance contracts or other requests initiated and funded by public or donor funding are not considered to be opportunities, as in these cases businesses act as secondary stakeholders, do not contribute additional funds to the field and rarely develop a financially sustainable resilience building intervention.
The approach taken has been to explore the current state of private sector engagement in resilience building and future opportunities through primary and secondary research, to showcase potentially viable business models and to understand challenges to private sector engagement in this space. As case studies, we focused on the vulnerabilities of and opportunities in four of the ten cities participating in the Asian Cities Climate Change Resilience Network (ACCCRN) program1 -- Gorakhpur and Surat in India, Semarang in Indonesia and Chiang Rai in Thailand.
We hope the findings of the study will inform key stakeholders on business opportunities and challenges in the urban resilience building field. Private sector actors, from large corporations to social enterprises (SEs) to community owned companies, seeking to better understand business opportunities in resilience building could find value in the results, as could investors looking to channel capital to the space, and local or national government agencies seeking to develop facilitative policy to engage the private sector.