The role of finance in addressing climate change—but where is the conversation around SME’s?
It would be an understatement to say that finance is one of the big issues being discussed at COP21. I’ve managed to pop into a number of side events on the topic and it comes up in even the most casual of conversations (here at the COP casual conversations are either about climate change or how little sleep we’re all getting). There’s no doubt that a great deal of progress has been made at the highest levels. Mark Carney, Governor of the Bank of England and Chairman of the G20’s Financial Sustainability Board recently announced a task force for looking at systemic climate risk to be chaired by Michael Bloomberg.
Carbon Tracker’s work in identifying the carbon bubble and doing the financial analysis to help companies and investors draw down their investment in fossil fuels has been key to moving the conversation towards a low carbon future and the need to do it quickly. And at the other end of the spectrum, LDC’s continue to push for further financing on both the mitigation and adaptation funds with some movement towards fulfilling those demands.
Move investment finance towards developing countries - and then what?
We all finally recognize the need to move finance away from investment in fossil fuels and towards sustainable technologies, infrastructure adaptation and clean energy. The recognition that much of this money will need to flow to developing countries has not gone missed either.
So here’s my question—why is no one talking about how we’re going to actually use this money when it arrives in a way that actually supports low carbon technologies, job growth and environmental restoration in developing countries and doesn’t end up in government coffers, parastatal energy and industrial companies or worse yet just syphoned off into the pockets of the corrupt?
SME's as a solution
The role of SME’s in emerging markets can’t be overstated. In almost every developing country it provides the bulk of employment as well as being a hotbed of innovation, new business models and ways to engage women in the workforce.
So why are we connecting the climate agenda to the entrepreneurship agenda more closely? Would we not be better off building the mechanisms that we need to ensure that we have ways to distribute funding to this sector as part of our climate agenda?
To that end, tomorrow, SEED will host a dinner discussion around the Green Climate Fund and how to connect public sector funding with on the ground green SMEs. Hopefully, it will be the start of a critical conversation and one that we can bring more players into soon.