ENGAGEMENT OF THE PRIVATE SECTOR IN ADAPTATION PLANNING PROCESSES, INCLUDING NAPS: CHALLENGES AND OPPORTUNITIES
The 2019 Adaptation Forum took place on 10 April 2019 during the Korea Global Adaptation Week 2019. Divided in two 90-minute sessions, the first session focused on the challenges, and the second one on the opportunities, of engaging the private sector in adaptation planning processes.
Part I – Challenges in engaging the private sector in adaptation planning processes
After an opening address by Cecilia da Silva Bernardo, a member of the Adaptation Committee , the first session started with the launch of a new publication by the NAP Global Network, titled “Engaging the private sector in national adaptation planning processes”. The presentation highlighted the role of the private sector in supporting adaptation planning, barriers to engaging the private sector in adaptation, and ways to involve the private sector in all phases of adaptation planning and implementation.
The study “Engaging the private sector in national adaptation planning processes” offers guidance to governments and their partners on how to engage the private sector in the NAP process. Private sector engagement in the NAP process, for the purposes of this paper, is defined as the meaningful involvement of private sector actors—ranging in size, sector, motivation and whether they operate in the formal or informal sector—in the planning, implementation, and monitoring and evaluation of national adaptation planning processes. Governments remain the overall owners and drivers of the NAP process. However, for NAPs to be successfully implemented and climate resilience strengthened, private sector actors will need to be involved.
The three primary objectives of this study are:
- To outline the enabling factors that facilitate private sector engagement in NAP processes, namely, information sharing, financing, institutional arrangements and capacity building.
- To offer practical guidance on how countries can design their NAPs to ensure that the private sector is engaged across the three phases of the NAP process: planning, implementation, and monitoring and evaluation.
- To provide examples of instances where the private sector has successfully engaged with the NAP process, as well as with climate change adaptation more broadly.
The subsequent panel, consisting of country representatives from Ghana and Angola, as well as representatives from Fondo Acción and the NAP Global Network, focused on concrete examples of how governments and organizations have tried to involve the private sector beyond the implementation phase and identified existing challenges.
Subsequently, participants identified their top four challenges and worked actively on how to overcome them.
The participants were asked to present three ideas on how to overcome the top four challenges identified. Those ideas were:
Information sharing/Communication:
- Definition of a communication strategy by governments;
- Share concise information on adaptation with the media;
- Make available sector specific climate information and data;
Lack of understanding of climate impacts:
- Develop sector-specific material, considering that the private sector is a very diverse set of stakeholders;
- Emphasize the risks that climate change poses to companies’ business models;
- Make use of intermediaries, such as business or sectoral associations, who have a good access to, and know how to effectively target, the private sector;
Lack of incentives to get involved:
- Incentivize financial institutions to support adaptation action;
- Encourage action through tax rebates;
- Removal of regulatory incentives which foster maladaptation;
Missing institutional arrangements/regulations:
- Align the government’s business policies and climate policies;
- Identify “NAP champions” from the private sector who are given a formal role as part of the NAP process, such as sitting on a NAP coordination committee;
- Regulate private sector actors to disclose climate information.
Part II – Opportunities in engaging the private sector in adaptation planning processes
The second part on opportunities in engaging the private sector in adaptation planning processes was launched with a presentation by the Jamaican brewery Red Stripe. Red Stripe implemented an adaptation plan that centred on shifting to the use of climate-resilient crops in its production processes. The company also participated in the government’s NAP process and supported its related communications and outreach efforts.
In 2013, Red Stripe—Jamaica’s most famous brewery—began its Project Grow initiative, turning to local cassava production instead of relying on imported corn syrup for its malt, beer, and stout beverages (Jamaica Observer, 2017). The initiative’s goal was to increase the use of local cassava by 40 per cent by 2020 through the development of a sustainable and resilient cassava starch supply chain (Heineken, 2015). To date, more than 300 farmers have been supported by Project Grow (Jamaica Observer, 2017).
Cassava production is, however, vulnerable to climate change impacts such as drought, floods and hurricanes. Increased incidences of drought in recent years have resulted in failing cassava, yam and ginger crop yields in some parts of the country. The Jamaican Rural Economy and Ecosystems Adapting to Climate Change II project, funded by USAID in cooperation with Red Stripe, has supported increasing the adaptive capacity of cassava farmers by providing them with technical assistance, delivering training, promoting the use of high-yielding and drought-tolerant cassava varieties, and propagating high-yielding planting materials (Jamaica Observer, 2017).
These actions have supported the achievement of the goals set out by Jamaica’s NAP process by bolstering the resilience of cassava farmers. Red Stripe is also a member of the Private Sector Organisation of Jamaica, an active supporter of Jamaica’s climate change agenda and NAP process. In addition, Red Stripe actively participated in “Uncut Conversations,” a public outreach initiative of the government to discuss climate change mitigation and adaptation with local communities and stakeholders. Engaging Red Stripe in this campaign was a strategic decision to involve them in the process and to encourage other private sector actors to follow suit. These conversations proved influential in spreading awareness about ongoing adaptation initiatives and actions, thereby spurring further private sector engagement.
Source: NAP Global Network (2018): Engaging the Private Sector in National Adaptation Planning Processes. Available at: https://bit.ly/2UDLBig
The presentation was followed by a panel discussion, featuring the representatives of Red Stripe, the Green Climate Fund (GCF) and the GIZ. The GCF highlighted that one of its core objectives is to catalyze private investment—as countries will not reach the scale of adaptation needed without the private sector—and support private sector in five ways: 1) Advocating for policies to enable and incentivize private sector engagement in adaptation; 2) Engaging private sector actors in adaptation planning processes; 3) Support individual businesses in making their supply chains more resilient; 4) Supporting the design of insurance products; and 5) Brokering between adaptation solutions and business investors. As an example, Uganda, with support from the GCF, is creating a network of private sector institutions to support the government in steering and designing its adaptation planning processes.
The GIZ highlighted the need to distinguish between two main areas in which the private sector can engage in adaptation:1. the provision of finance, and 2. the implementation of adaptation action. In terms of the implementation of adaptation action, GIZ is working on: the standardized assessment of risks for small- and medium-sized enterprises (SMEs) and the capacity building of SMEs through the Climate Expert approach. In terms of the provision of finance, the GIZ is working on setting up credit lines for investing in environmentally friendly technologies in collaboration with development banks and sees potential in project preparation facilities to develop generic proposals into bankable projects.
Key outcomes
- Mitigating risks is core to every business. Governments and organizations should support businesses in helping them understand the climate impact on their business models better, as well as create an environment to enable the implementation of the business models. For that it is important to provide accurate and reliable information and data, build capacity and communicate in a business-tailored and sector-specific way;
- Businesses are willing to engage with governments in their adaptation planning processes, as predictable plans and regulatory frameworks are important for companies’ strategies. However, in many cases, the platform for interaction or the right intermediary is missing. For that, developing a programmatic approach to include the private sector in the process of adaptation planning and implementation is required, in contrast to implementing individual and short-term projects in an ad hoc manner;
- Financial support for the private sector is available, including through the Green Climate Fund and (multilateral) development banks, but the knowledge on how to access this support is limited;
- In a changing world, new business opportunities can arise. To help harness these opportunities, countries could harmonize their business and climate policies and create an enabling environment for businesses to thrive in sectors identified as particularly vulnerable in the national adaptation planning process.