Involvement of private sectors, including SMEs, to address Climate Change is essential for multiple reasons. First of all, given the scale and pace of emissions reductions needed, it is critical that companies across the board urgently act to reduce carbon emissions both in their direct operations and in their supply chains. Secondly, climate change presents material risks to business operations e.g. through infrastructure damage from flooding, droughts and severe weather systems, which in turn introduces new challenges to a fragile and vulnerable enterprise system, in particular for the SMEs. Thus, it is critical for SMEs to both find ways to mitigate emissions, and to be prepared to deal with future climate impacts to increase resilience
This side event hosted by UNFCCC/IGES Regional Collaboration Centre in Bangkok (RCC Bangkok) in collaboration with ESCAP, IDRC and UNIDO had the following objectives:
- present the initial findings from a UNFCCC/IDRC mapping study of capacity building gaps and needs in relation to climate action of SMEs in South-East Asia
- increase understanding of the support provided to SMEs by different stakeholders in the region and identify areas for future collaboration to take meaningful steps on climate engagement with the SMEs
At the side event, it was reiterated that Small and Medium-sized enterprises (SMEs) form the backbone of Asian economies, accounting for an average 97% of all enterprises, 69% of employment, and 41% of GDP in the ASEAN region (ADB, 2020[1]). SMEs can pave the way for greening and adapting to climate change across economic sectors, including industry and manufacturing, agriculture, tourism and energy sectors. However, due to limitations in size, SMEs face larger challenges when it comes to the capacity to green their operations, including knowledge about technologies and process to reduce carbon emissions and to climate-proof their business. Some of the key messages from this side event include:
- a need for assessing and integrating climate risks to SMEs operationalization strategies
- providing a pragmatic value to climate actions for the SMEs – climate actions make the SMEs more resilient to climate and disaster shocks and advance their competitive value in the market
- translation of the climate change jargon into a language that will be widely understood by the SMEs and academia can be a key actor in this context
- enhancing climate risk management knowledge for the SMEs around key sectors, including agriculture, manufacturing and industrial sector, that are predominant in the ASEAN region
- improving access to technology to improve SMEs energy efficiency and co-benefits arising from it in addition to adding value to a decarbonized action plan.
- complementary market transformation to de-risk the investment by standard technologies
- monitoring awareness and sharing data through peer-to-peer learning and retaining internal capacities to avoid over-reliance on externalities
- improving the functional modality by including bigger companies to play a supportive role for the SMEs and integrating them into the overall strategic action plan
- finance is fundamental to furthering climate resilient capacities of the SMEs as are the SMEs to the socio-economic fabric of the countries. Hence, needful support to understand both where to and how to access climate finance
- the coherent and coordinated need to catalyse and scale-up actions as there are a number of actors and players already
