Hello, (it’s James Militzer at NextBillion, at the William Davidson Institute). NextBillion publishes guest articles from entrepreneurs and others working in emerging markets, and one challenge that’s garnering growing attention from guest writers is the issue of societal instability due to climate change. Take this recent article for example, which explores how Zambia’s government (and its business sector) are responding to this challenge: https://nextbillion.net/emerging-priority-climate-resilience-zambia-green-growth-strategy-business-sector-addressing-risk-climate-induced-social-instability/. This challenge seems likely to get worse, as the impacts of the climate crisis escalate.
Q2 - key challenges businesses face when helping people mitigate, adapt to, and build resilience against climate change …
- ensuring women have the access to resources and decision making spaces is crucial
- Women produce up to 80% of food in the global South and are affected most by climate change
- Promoting gender equality in supply chains is essential for guaranteeing the long-term sustainability of businesses in a changing climate.
- Companies have a powerful role to play in fostering a gender-responsive climate response.
1 Like
Key Challenges and Opportunities for Businesses in Supporting Climate Mitigation, Adaptation, and Resilience
Challenges
1. Complexity of Climate Change Impacts
Climate change affects communities differently, with impacts varying by geography, economic status, and infrastructure development. Businesses face the challenge of designing strategies that address these localized and diverse needs while remaining scalable. For example, solutions that work in urban areas may not be effective in rural or coastal regions, where vulnerabilities are different.
2. Limited Resources and Funding
Many businesses struggle to allocate sufficient financial and human resources to climate resilience programs, particularly small and medium-sized enterprises (SMEs). High upfront costs for sustainable infrastructure, renewable energy integration, or community programs can deter investment, especially without immediate returns.
3. Regulatory and Policy Uncertainty
Inconsistent or underdeveloped regulatory frameworks around climate action in some regions create uncertainty for businesses. Navigating different legal landscapes can slow implementation, especially when there is a lack of incentives for investing in mitigation and adaptation initiatives.
4. Balancing Profitability with Social Impact
Businesses must manage the tension between profitability and the costs associated with helping people adapt to and mitigate climate change. This is particularly challenging for industries with high carbon footprints, as they are under scrutiny to deliver both financial and environmental value.
5. Interconnected Risks
Climate risks such as extreme weather events, rising sea levels, and biodiversity loss are interconnected and unpredictable, making it difficult for businesses to create resilient systems. These risks can disrupt supply chains, damage infrastructure, and affect local economies, compounding the challenge.
Opportunities
1. Strengthening Community Resilience as a Business Driver
Businesses have an opportunity to create shared value by investing in community resilience. For example, programs that promote sustainable agriculture or disaster-resistant infrastructure can stabilize local economies and ensure a steady supply chain while earning goodwill and brand loyalty.
2. Innovating Climate-Smart Solutions
The urgency of climate adaptation offers businesses a chance to lead in innovation. Developing climate-smart technologies such as renewable energy systems, water-efficient irrigation, or resilient infrastructure not only addresses climate challenges but also opens new markets for sustainable products and services.
3. Collaboration and Partnerships
Climate action often requires collective effort. Collaborating with governments, NGOs, and other private sector players can amplify a business’s impact while sharing the burden of resource investment. Such partnerships also enable knowledge exchange and foster trust among stakeholders.
4. Accessing Climate Finance
Businesses can tap into growing opportunities in climate finance, including carbon markets, green bonds, and international funds like the Green Climate Fund. These financial mechanisms can help offset costs while supporting projects that align with climate mitigation and adaptation goals.
5. Enhanced Employee and Consumer Engagement
Employees and consumers are increasingly drawn to businesses that demonstrate environmental and social responsibility. Supporting climate action can enhance a business’s reputation, improve employee retention, and attract environmentally conscious consumers, creating competitive advantages.
6. Influencing Policy and Governance
Businesses that engage in advocacy and policy development can help shape enabling environments for climate action. By actively participating in the creation of regulatory frameworks, companies can ensure policies align with practical, impactful solutions while securing a favorable business climate.
7. Unlocking Long-Term Growth and Stability
Proactively addressing climate resilience can mitigate future risks such as supply chain disruptions, resource scarcity, and economic instability. Businesses that invest in long-term climate strategies position themselves as leaders in sustainability and resilience, ensuring growth in a rapidly changing world.
Conclusion
While businesses face significant challenges in mitigating, adapting to, and building resilience against climate change, these hurdles also present transformative opportunities. By prioritizing community engagement, investing in innovation, leveraging financial tools, and fostering partnerships, businesses can drive meaningful impact. In doing so, they not only address the immediate needs of climate-vulnerable populations but also secure their own future in a sustainable global economy.
1 Like
Key challenges includes the growing impact of climate change in Malaysia such as rising temperatures, intense storms, floods, and droughts, hence strained healthcare systems, disrupted supply chains, and increased the prevalence of climate-sensitive diseases like dengue and waterborne illnesses, especially in some states like Sarawak. NCSM has faced it all, but we stay committed to bring healthcare access to the rural communities in Malaysia, thanks to businesses such as Etiqa, which assists us to focus on women’s health and climate change initiatives.
Funding still remains as a major challenge, as addressing both climate and social resilience requires significant resources, from medical supplies to climate adaptation projects. There is lack of climate data and timeliness of data, and institutional capacity. Vulnerable populations ins Malaysia includes refugees, indigenous communities, and low-income B40 households,. They face compounded risks due to inadequate housing, poor sanitation, and malnutrition. Wealth, education, and employment often dictate any average Malaysian’s ability to access healthcare services. Many marginalized populations also lack awareness of available healthcare services due to lower levels of education, linguistic barriers, or cultural differences. For instance, indigenous Orang Asli communities living in remote forests may face logistical challenges in reaching healthcare facilities, while urban refugees and migrant workers often experience financial barriers or fear discrimination, deterring them from seeking medical help.
There is no proper recycling pathway in Malaysia, and it is often expensive to accommodate to clinical waste as well. Dumping grounds are minimal, and transportation fees are expensive.
Opportunities includes Community-Based Initiatives : Strengthen community health interventions by educating people on climate-related health risks, promoting climate adaptation strategies like sanitation and clean water access, and reducing climate-sensitive diseases through preventative care, through the mobile Etiqa truck.
Public-Private Partnerships (PPPs) : Collaboration with the Malaysian government and private sector allows NCSM to pool resources, technical expertise, and policy support.
Leveraging Technology: NCSM offers innovative solutions, such as digital EMR system and telemedicine to reach remote populations, data analytics for predicting and managing disease outbreaks, and mobile health units for deployment of cancer drugs and vaccines during natural disasters.
Advocacy for Policy Change : NCSM plays a vital role in advocating for policies with the government that integrate climate resilience into public health strategies. This includes disaster preparedness, environmental regulations to mitigate health risks, and greater investments in healthcare infrastructure.
Building Local Capacity: NCSM is currently empowering local communities through training healthcare workers and leaders in each state of Malaysia to fosters long-term resilience. This enhances community ownership of health programs and ensures sustainable impact.
1 Like
The main challenge is that businesses have to rethink the way in which they operate at a fundamental level. Since the Industrial Revolution, the system has been built to worry about generating profit, and there are mechanisms lacking to help them make that transition in the current climate. Both governments and companies are oriented towards economic growth, and the planet is reaching its material limits to keep up with this, so to transition towards circularity or degrowth is of course very challenging.
1 Like
Totally agree Hina! We’ve been talking a lot about how companies can engage through producer networks and community platforms in the supply chain lately - whether that’s through supporting vulnerable groups to establish these, working through functioning set-ups, or strengthening existing platforms - seeing this as a part of the route to more equity in the supply chain. Also love your point about the emotional state of all of us!
1 Like
A big challenge is helping people understand why these changes are needed. Many don’t see how things like clean energy or better farming practices can help them personally. Another issue is cost. many solutions are expensive, making it hard for businesses to provide them in a way people can afford.
But there are also great opportunities. Businesses can come up with simple, affordable solutions that solve real problems. For example, offering cheaper ways to grow food, save water, or reduce waste can help people in their everyday lives while also creating jobs and growing the economy.
1 Like
One of the key challenges is ensuring that climate-focused strategies do not disproportionately affect vulnerable communities. For instance, climate resilience efforts often involve shifting agricultural practices, introducing new technologies, or promoting certain crop varieties. However, without careful consideration, these measures can unintentionally exacerbate existing inequalities, leaving marginalised groups, such as smallholder farmers or Indigenous communities, more vulnerable to climate impacts.
There is also the challenge of measuring these impacts at scale. While businesses may have tools to track environmental outcomes, measuring socio-economic improvements, such as better working conditions, fair wages, or enhanced livelihoods, requires careful planning and the development of clear indicators that are both reliable and scalable.
On a more systems level, the biggest challenge is the unequal distribution of influence and resources between the global North and the global South. I think that is tackled, though, on a variety of scales, from policy levels at national/regional levels to individual business levels.
So, on a more business level, I see one of the biggest key challenges I see is the disconnect between decision-making teams (usually seated within corporate headquarters) and more place-based teams that are closer to the majority of workers and communities. So, while businesses are open to supporting people within their sphere of influence to help people adapt to, mitigate and build resilience, most medium to large businesses don’t know where to start. Operationally, therefore, there is an internal challenge of being able to make those connections with more regional teams within procurement, HR, field teams and establish some key metrics and questions that can help headquarters understand the place-based needs, and then determine how they can best support.
In a way, this is how engaging in a just transition should work. It is not a top down decision/commitment, but rather matching needs, challenges, and initiatives on a local level.
1 Like
Thank you for this question, Alice. We were privileged to launch the report in the run-up to Climate Week NYC and managed to run a session which was very well attended. There’s been much interest from partners in the US and beyond in the issue of climate justice. Given it’s only been a few months, it’s early to tell the full reach of the report but our hope is to continue working on climate justice via this or complementary avenues.
1 Like
Q2. Access to financing remains a critical barrier for businesses implementing large-scale climate initiatives, particularly in regions with fragile economies. High upfront costs associated with transitioning to renewable energy, retrofitting infrastructure, or adopting sustainable supply chains often exceed the financial capacity of many small and medium-sized enterprises (SMEs). Additionally, traditional financing models frequently fail to accommodate the unique needs of climate projects, which require long-term investment horizons and innovative funding mechanisms. Financial institutions and investors often perceive climate initiatives in economically vulnerable regions as high-risk due to political instability, weak regulatory frameworks, and fluctuating market conditions, further limiting access to capital. This challenge is exacerbated by capacity gaps, as many businesses lack the technical expertise to design bankable climate projects or meet the rigorous application criteria of international climate funds, such as the Green Climate Fund or Adaptation Fund. Furthermore, global climate financing tends to be disproportionately allocated to larger, more developed markets, leaving businesses in low-income or high-risk regions underfunded. Addressing these barriers requires innovative solutions, including blended finance models that combine public, private, and philanthropic funds to mitigate investment risks, capacity-building programs to help businesses develop robust climate proposals, and policy reforms that provide incentives such as tax breaks or subsidies for climate-related investments. Additionally, localized funding mechanisms and microcredit schemes can empower smaller businesses, while global advocacy efforts can increase financial commitments toward underserved regions.
Qu 2 Trade offs - sometimes E and S strategies might not align - classic scenario being needing to make emissions reductions in supply chains by cutting transportation costs (often one of the highest emitters) therefore risking jobs in sourcing countries. However growing produce in energy intensive greenhouses in Europe also has high emissions costs - so its not always that straightforward.
E&S teams working together - breaking traditional working silos and KPI reporting etc.
Love this John - so clear!
1 Like
Stereotypes also make things harder. Some people think that climate-friendly solutions are only for the wealthy or urban areas, while others believe traditional ways of doing things are better. These assumptions have slow down how quickly people accept new ideas and limit their use.
1 Like
Challenges in Climate Action for Businesses
My response is basically centered around our work in the northern Nigeria sub–Saharan Africa, as this speaks of the challenges, we are facing within this region in Gombe State, Nigeria
- Limited Awareness
Many local businesses and communities are unaware of the immediate and long-term impacts of climate change on their operations and livelihoods. Proactive climate mitigation and adaptation strategies are often overlooked due to a lack of education and access to information. This creates a barrier to understanding the urgency of climate action and limits participation in initiatives that promote sustainability. that’s why at lets Build for humanity Initiative one of our efforts is around awareness campaigns in schools and communities. Lets Build for Humanity | LinkedIn
- Resource Constraints
The high costs associated with acquiring and implementing sustainable technologies, such as renewable energy systems or water-efficient infrastructure, are prohibitive for many small and medium enterprises (SMEs). SMEs, which form a significant part of the local economy, struggle to adopt practices that would reduce their environmental footprint and increase resilience against climate risks.
- Policy Gaps
Inconsistent, unclear, or poorly enforced policies on climate action and environmental sustainability create confusion for businesses. The lack of financial incentives, clear guidelines, and support mechanisms discourages businesses from taking bold climate actions. Without a supportive policy framework, businesses face uncertainty, which hampers investment in long-term sustainable practices.
- Resistance to Change
Many traditional practices and cultural norms do not align with modern, climate-resilient technologies and methods. Skepticism toward new innovations, combined with a preference for familiar approaches, delays the adoption of sustainable solutions. Resistance to change stifles innovation and slows the progress needed to build resilience against climate impacts.
The biggest challenge is to ensure companies recognize action on adaptation and resilience is as important as investments in mitigation. Right now most investment is going into mitigation. The reality is that climate change is already affecting workers and communities now.
Relatedly, the challenge is that companies need to support the range of partners in value chain communities that are dealing with climate change now. Grassroots organizations in value chain communities need to be seen as essential components of building resilience. And these don’t often have environment by their names.
But they are doing the work. An Insights Report by the Resilience Fund, which we help manage, captured the climate impacts our grantee-partners (grassroots women-led organizations) are already seeing and facing:
• Gender-based violence – increases due to shifting power relations; migration, and sex work with loss of employment
• Health issues – menstruation (changes in women’s and girls cycles); malnutrition (due to land degradation), sexually transmitted diseases, sex work
• Increased displacement
• Increase child labor
There are many opportunities for companies to integrate worker health and wellbeing and do this with a gender lens. There is no need for any company to start from scratch – as there have been 25 years of experience. The issue is to go beyond a narrow compliance perspective and take on the principles of Just Transition. JT is not just about the workplace impacts.
Several areas that are opportunities to deal with the health impacts:
- Telemedicine. This has been tested thanks to the Pandemic and can be effective for extending health information and needed services.
- Insurance. Several have mentioned insurance but these products – for direct impacts and more broadly for reproductive health and other services – is about help build out Universal Health Care.
- Nurse/workplace health staff. Workplace nurses have capacity and talent to do much more, if employers would recognize them as critical resources. Their role needs to be recognized as much higher than an entry level staff. Building skills around health services and referrals, especially related to women’s health but also direct climate impacts on workers and their families.
Companies can also make commitments or join collective action initiatives that should be integrated into climate action: - UNFPA’s [Coalition for Reproductive Justice in Business](https://unfpa coalition for reproductive justice in business) – promoting reproductive health standards.
- RISE (an alliance of BSR’s HERproject, Better Work, Gap’s PACE program, and CARE) – collective action on workplace health, financial literacy, gender-based violence.
- UAP Women’s Health project for actionable corporate commitments on health
1 Like
I totally agree Claire, and I think this is where integrating training and education at ALL levels of the company is crucial. Sustainability is not seen enough as a transversal and intersectional subject, but more as a specialized subject.
2 Likes
Current stats: 130+ countries, 50+ formal partners, 40+ more in the pipeline, just under 1,000 enterprises on board since launching last year.
1 Like
Agree on these… We look at awareness also around health.
- Climate smart businesses face stiff and unhealthy competition from the conventional business practices which are majorly aimed at maximizing profit without necessary considering the climate resilient factors.
There are also challenges of policy gaps to address such salient issues focusing on climate resilience