The Private Sector and Climate Change Adaptation

published on 23 November 2022
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Revue Secteur Privé & Développement, Proparco
AFD Group’s private sector subsidiary, Proparco, has released the 38th issue of its Private Sector & Development magazine, dedicated to climate change adaptation. In this latest issue climate experts, think tanks, donors, and entrepreneurs, examine actions – both under way and possible in the future – that Development Finance Institutions and the private sector can take to tackle the challenges of the climate crisis.

Just out, the 38th issue of the Private Sector & Development magazine examines the main challenges of climate change adaptation, and the initiatives implemented by the private sector through interviews, analytical articles and a spotlight on projects supported by Proparco. 

Adapting to climate change is not an option. The latest report from the Intergovernmental Panel on Climate Change (IPCC), published in April 2022, estimates that 3.3 to 3.6 billion people live in areas of high vulnerability to climate change. For them, as for all countries on the planet, adaptation is a matter of urgency.

And yet, investments dedicated to adaptation to climate change are insufficient. Adaptation to climate change only accounts for 7% of total “climate finance”. Still regarded by many in the private sector as unprofitable, it mainly comes under public financing, despite the massive need for public and private investment. 

In developing countries, which are particularly vulnerable to climate change, it is becoming essential for a company to assess the climate risks it is exposed to and consider measures to adapt to them.

Powerful impact of investment: a little goes a long way

Studies carried out by The Global Commission on Adaptation demonstrate the strong leverage effect of investments linked to adaptation to climate change. Investing $1.8 trillion worldwide in five areas (warning systems, agriculture, infrastructure, mangroves, water resources) between 2020 and 2030 could produce $7.1 trillion in economic benefits, i.e. four times more. 

“Development Finance Institutions like Proparco have a key role to play in this, both in financing adaptation projects and in mobilizing private finance,” says Proparco CEO Françoise Lombard, “which is essential for moving forward faster on this issue and taking it further.” 

As the experts in the magazine argue this month, acting early means both limiting losses and producing economic, social and environmental gains.

Read issue 38 of the Private Sector & Development magazine: "Adapting to climate change: the private sector is scaling up"