ANDE Call to Action to COP26 Leaders

As COP26 opens today in Glasgow, we ask that world leaders recognize and support the full contribution small and growing businesses (SGBs) make in tackling climate change as key actors alongside government and large corporations. Small and medium enterprises (SMEs) constitute 90% of businesses,  more than 50% of employment worldwide, and 40% of GDP in developing economies. Small businesses not only create jobs, but also can develop and deliver solutions to help us get to net zero faster. If small businesses, especially those developing and delivering climate solutions, are ignored in climate finance decisions at COP26 and beyond, a just transition to a net-zero world economy is simply impossible.     

ANDE’s vision is where small and growing businesses are fully supported to optimize their role in mitigation efforts, local adaptation, and support a just economic transition. For small businesses to achieve their full potential in tackling climate change, world leaders need to:

• Make climate finance accessible to small businesses: This means increasing financing for adaptation and allocating climate finance that meets the needs of small businesses. Green entrepreneurs need to be supported with the right types of capital, such as low-cost and patient capital, and technical assistance to help them optimize their growth opportunities. 
• Accelerate the accelerators and incubators: About 25 climate incubators and accelerators located outside OECD countries in recent years according to the Global Accelerator Learning Initiative (GALI). This is unacceptable given the urgency of the transition required globally. We need rapid investments to help speed and support the necessary innovations in developing countries to mitigate and adapt to global warming and build local community resilience. Innovations consistent with Nationally Determined Contributions (NDCs) and national adaptation plans should largely be locally generated and scaled. Very few governments have consulted with one of their own biggest resources for innovation – the small business sector in their own countries. Creating enabling environments to support such local innovation and entrepreneurship is essential. This means increasing the number of climate tech incubators and accelerators in developing countries.
• Invest in women green entrepreneurs: Women produce 80% of food in developing countries and are most at risk from the effects of climate change. They are also agents of change. Investing in women green entrepreneurs is good business and a climate and social imperative.
• Measure well: ESG metrics are insufficient for investors focused on small businesses and for the businesses themselves, where compliance costs are unmanageable. We need appropriate climate metrics that are grounded in the realities that small businesses face, and to use the best of new technologies (e.g. sensors for automated data collection) to help measure and manage appropriately.

The just transition to net zero we must achieve also means that small businesses need to reduce their own emissions, evaluate their supply chain sustainability and adopt a circular economy model where feasible. Everybody has to play their part in igniting a “green revolution” in the entrepreneurship ecosystems of the world’s developing economies.

For more information how green entrepreneurs are tackling climate change in developing countries, read ANDE’s report: Climate Entrepreneurship in Developing Economies: Supporting Entrepreneurs Tackling Climate Change – ANDE (andeglobal.org)

For more information on how funders are approaching barriers and opportunities to fund green entrepreneurs, read ANDE’s report: Climate Entrepreneurship in Developing Economies: Funder Perspectives on Approaches, Challenges, and Opportunities – ANDE (andeglobal.org)

For more information on how ANDE members are confronting climate change, read ANDE’s report: Climate Entrepreneurship in Developing Economies: A Look at ANDE Member Support for Climate Entrepreneurship – ANDE (andeglobal.org)