The climate negotiations in Paris - What does it mean for the green SME community?
In just five days, politicians, policy makers, NGOs, businesses, entrepreneurs and activists will head to Paris, for the 21st Conference of the Parties (COP), to see whether the world can hammer together an agreement to move the world away from catastrophic climate change before time runs out. Will they be successful? Current feelings are that there is a chance that on December 12th the world will indeed have hammered out some sort of agreement to start bending the carbon curve and take the steps needed to move us to a low carbon future.
It would be wrong to say that such an agreement would not be an important step forward in the march towards a more sustainable development path. But it’s important that we all realise a number of things. First, the agreement (should it occur) would only be the first step in a long journey that will require us to fundamentally change the way we invest money and produce everything from energy to the food we eat. It’s also important that we realise that after the final text is agreed and the politicians and policy makers turn over the agreement to the practitioners that this is when the hard work starts.
The role that green SMEs, be they in the US and Europe or Latin America and Africa, have to play in this new way of doing business will be a critical part of reordering the new economy. For we have seen time and again that Schumpeter’s creative disruption tends to come from start-ups rather than the incumbents and that change always produces winners and losers. We would be naïve to think that the move to a more green and inclusive economy will produce only winners and there will not be technologies, companies and indeed people and communities who will lose out, who will need support and retraining and who will be forced to find new jobs and livelihoods. But it is in addressing this problem that the SMEs of today can play a critical role in providing new jobs, new sectors of growth, and in creating new, cleaner, ways of doing business. But this can only happen if we acknowledge their role today as hotbeds of innovation and their role of tomorrow as the employers of the future.
Green and inclusive SMEs and start-ups are underrepresented at the COP
The question for entrepreneurs and social and environmental SMEs around the world is whether or not the decision makers at the COP will acknowledge this crucial role and ensure that support is provided at scale and in ways that help rather than hinder the growth of this new green inclusive economy. We’ve seen some early positive signs with the Global Carbon Fund’s decision to allocate a part of their funding to non-traditional and smaller funding bases focusing on green and social enterprises in developing countries. We’ve seen increasing interest by the multilateral development banks in the SME sector, setting up investment funds and capacity building programmes. However, what we’re not seeing is an increased presence of green and inclusive SMEs and start-ups at the COP and in the high-level meetings that take place regularly in Bonn, New York and London that are used to set the agenda and influence policymakers. Instead, these meetings are limited to the major corporates (as part of an increasingly awareness that business does indeed have a constructive role to play in this area) who have a vested interested in ensuring that if there is change, it’s done slowly and incrementally rather than in leaps and bounds to protect their market share.
SMEs are a key player in the roadmap to a climate-resilient, inclusive economy
If we are truly going to use the Paris COP to create the roadmap to a climate-resilient, inclusive economy then we need to start listening to the voices of the SME community. We need to ensure that the start-up entrepreneurs of today have a voice at the table and that national development and industrial plans take into account their needs and aspirations. We need to ensure that money is put into basic R&D by governments around the world, that finance is available to cleantech start-ups whether they’re found in Silicon Valley or the Rift Valley, and that the race to stop climate change doesn’t further concentrate resources into the hands of the few.
As things stand, an agreement of some sort emerging from the COP is likely to give the green SME community a boost due to an increased awareness of the sector. But the SME community needs to grasp this opportunity and make their voices heard in in-country policy debates. And those of us who work to help green and inclusive start-ups need to ensure that capacity is built through the entire ecosystem making it easier for investors to support entire sectors of the economy rather than one or two companies. The COP offers a window of opportunity as the outlines of a new low carbon economy begin to take shape for the SME community and those that support them to integrate their needs into local regulation and policy. The question is – is the SME community ready to grab hold of the opportunity?