Unleashing the power to change of SMEs with increased, action-oriented capacity building - MENA

With just weeks to go before the long anticipated, and delayed, COP in Glasgow, expectations - and obligations - have rarely been greater. Ahead of a scheduled side event at the COP to be hosted by the UNFCCC at which it will be presented next to three further regional mappings, Climatekos has prepared a Mapping study for private sector engagement in capacity building activities for climate action in the MENA countries, together with the UNFCCC secretariat and its Regional Collaboration Centre Dubai.

Part of a quartet of studies undertaken (other regions being Africa, Asia, and Latin America) it highlights the central role of the private sector in climate change adaptation and mitigation efforts to achieve global climate goals and build climate-resilient regions - particularly so in MENA countries, whose economies will likely be heavily impacted by climate change in coming years. With changes already reported in the region expected to accelerate and intensify in the near future, it has been identified as a climate change hot spot by the IPCC.

Private sector involvement is essential; not only can it help mobilise financial resources, leverage governmental, civil society and community efforts, and develop innovative services and technologies, but the physical impact of climate change presents material risks to businesses which must be dealt with if they are to be made more resilient to them.

Many factors and challenges hinder particularly SMEs from engaging in climate action activities, such as lack of financial capacity to implement the climate action measures, and a lack of technical knowledge on climate adaptation and mitigation. Addressing the needs and gaps on climate action faced by SMEs in the MENA counties, the study aims to help prepare businesses and improve their resilience, as well as enabling them to make use of climate finance sources and better position themselves in the national climate policy environment.

At the same time the study assesses the state of play regarding carbon pricing instruments supporting the implementation of Nationally Determined Contributions. This is particularly important as we approach the COP, as this is likely to be one of the crunch issues, something emphasised by Climatekos’ Co-founder Robert Tippmann at the 3rd UNFCCC Capacity Building Talk held (virtually) 30 September. Knowledge around and the introduction of carbon pricing instruments requires increased efforts and support outside industrialised countries in the area of building private sector capacity. Otherwise we can hardly hope to achieve the objective of the Paris Agreement to limit global warming to 2°C.

The need for an improvement of knowledge transfer and communication between science and the private sector as well as between the private sector and state institutions is also important to promote the active participation of a wide range of stakeholders in climate capacity building. A key building block of private sector climate action engagement, the study calls for the creation of coalitions and consortia for increased private sector climate action in the MENA region, allowing moving forward swiftly in a climate change hot spot.

Supporting the deployment of targeted financial and technical assistance, such coalitions can trigger or promote snowball effects; international organisations bringing together SMEs, research organisations and trade associations, consortia at national and regional levels leading the way through the facilitation and moderation of actor groups – pushing for establishing the required enabling environment with the necessary instruments, incentives and regulatory frameworks at the same time. Enabling more companies to make use of the new capacity development offerings by research organisations and academia, processes, procedures and systems to proactively engage in climate actions can be established and implemented.

Highlighting what needs to be done to increase private sector engagement via capacity building, the study shows how global mitigation efforts transforming economic development and growth can be stepped up, not only in the North, but also in the South, towards low-carbon, net-zero or climate-neutral production and service provision.

In this decisive decade, to speed up action efforts should focus on industrialised countries. But we need in parallel to focus on the developing world, building capacity focusing on SMEs. For action to be effective and real, international organisations need to bring together companies, SMEs, research organisations and trade associations, the interplay of coalitions and consortia leading the way at civil, national and ultimately regional levels.

Climatekos gGmbH is an independent social enterprise in the field of environment and development focusing on international climate protection.