3 Reasons Why COP21 Matters if You’re a Small Business

Last week we received a message from our Internet provider apologizing for delays in email delivery. Their servers in Chennai were under water from one of India’s worst floods in a century. They were doing everything they could to re-establish services, moved their people and material and connected us to servers in other parts of the world.

If you are a small business in the North of the UK these days, you probably have lost your produce from lack of electricity and refrigeration and you begin to cost the damage done to your inventory. If you are in the South of the UK, you may have experienced the same last month.

The point is, wherever you are in the world, when you are small climate change hits big.

I spent a day at #COP21 in Paris this week, to take the pulse of the climate change negotiations. “Business” and its contribution to reducing greenhouse gas emissions is in every other reference. Whatever commitments governments make will not be implementable unless business does its part. And at COP21 that’s understood to be “big” business — the Unilevers and Arups of this world.

But what about small businesses? After all, they are 95% of businesses in any economy.

Here are, from the Paris corridors and from our own experience at The Ground_Up Project, three good reasons why #COP21 matters for small and medium sized entrepreneurs:

1. Your business environment will change (if it hasn’t already)

Assume governments agree on an objective to keep average global temperatures from rising above an extra 1.5–2°C compared to pre-industrial measurements. This objective will be translated into national commitments, which in turn will be implemented by some policy instrument.

In many countries the policy plans already exist. Take for example South Africa’s Integrated Energy Plan. “Nobody looks at national policy, entrepreneurs don’t find it directly of interest and don’t pay attention. But it’s precisely that policy that will impact their local business conditions. It will reflect in pricing, regulations and what public money is made available to what activities” told me Neoka Naidoo who works with 90by2030.org and is an observer with the South African delegation at #COP21.

Next year governments will begin to work on the means to implement the goals that they agree upon in Paris. Chances are that wherever you are in the world, from France to Suriname to Morocco, the UK or Kazakhstan, there is a climate or a green growth plan that will impact your business environment when an international climate change agreement is in place.

2. New financing will become available to your business

This year’s climate negotiations will see rich countries commit to pay developing countries $100Bn per year by 2020 to help their transition to a green economy. Governments already started to create new windows of funding for companies that create products, services and projects in water, energy, waste, forestry, transportation, tourism and other sectors of the green economy.

Financing initiatives are flourishing. Examples like the Climate Aggregation Platform launched this week at COP21 by the United Nations Development Program (UNDP) the Global Environment Facility (GEF) and the Climate Bonds Initiative, the Global Climate Partnership Fund, and many others (I’m told there are over 85 only focused on Africa). Their objective is to standardize information and aggregate portfolios such that larger investments, especially from institutional investors, can become available to small businesses.

Around the world, family offices, equity investors and asset managers pioneer impact investment, social merchant banks enable replication over scale, alternative currencies are designed to support local sustainable and circular economies and financial technologies are changing access to finance. More investment than ever will flow towards small green businesses in the years to come.

3. Your business will gain a competitive edge (for a change)

That is, of course, if your business has a positive impact on the environment. If it doesn’t, or worse if it harms the environment, chances are you are a dinosaur, about to become extinct.

The winners among small and medium sized enterprises of the next decades will be those that are doing business for a sustainable world. UNIDO estimates that the small and medium size enterprise market for 15 clean technologies in developing countries is more than US$ 1 trillion by 2023. And large corporations begin to look at small end medium enterprises as an important source of innovation and aggregation of impact.

By now, solar, wind power and waste recycling have become classics. But we also see a whole host of innovation in all types of products and services: waste upcycling — transforming waste into products of value, cosmetics that don’t just source organic ingredients but completely disrupt recipes and business models, small-scale farming that protects the forests, crowdfunded agriculture, taps and showers that halve the water use. And many, many more.

Small and medium sized businesses are a large and as yet untapped potential for greening our economies. They may be small, but they are many. If you are one of them, COP21 is about to change your business environment for the better, give you new access to finance and reward your work.