How can the private sector provide solutions to fight climate change?

Climate change is not only killing the Earth but is also causing huge monetary losses to mankind. According to reports, the world’s 55 most climate-vulnerable companies have already lost 20 percent of the GDP due to climate change.

By 2030 almost all large economies will be losing billions of dollars every year due to climate change. And at the current rate of adaptation, it’s unlikely to reduce.

The change in climate has led to more destructive storms, more severe droughts and increased cases of wildfires. It’s becoming increasingly difficult to fight this because of  the lack of private investment.

Governments have been putting huge amounts of money into finding more solutions for climate adaptation but the response from the private sector has remained somewhat  muted. Out of all the investment in adaptation funding, only 1.6 percent comes from the private sector.

Why the private sector?

Simply put, the private sector has more innovative ways of investing and earning money. The climate adaptation market is expected to reach $2trillion per year by 2026. This offers the sector a big incentive to invest more money.

Not only this, the private sector will also bring in new innovations and solutions to fight climate change and adapt to the solutions better.

At the COP26 Summit in Glasgow, developing countries demanded that the adaptation funding be doubled from 2019 levels to $40.6 billion in 2025.

It would also serve the private sector well to expand their climate adaptation ventures to more vulnerable countries in Africa and South and Southeast Asia.

What about the risk?

Although the field is relatively new, several businesses have proven that the dive into the field of climate adaptation may not be all that difficult. In the case of climate events, these ventures would help businesses in balancing their portfolio.

The solutions can range anywhere from providing finance to green startups, manufacturing modern equipment, introducing Agri solutions or even training people to form a new “green collar”workforce. All this would help in rapid climate adaptation.

At the same time, it would also offer businesses a first-mover advantage. In the time it would take other businesses to figure out the field, your business would be well-established and ahead of the game.

But why the private sector?

The world is going through an unprecedented phase of difficulty. Economic worries are being exacerbated by climate change and the pace at which the solutions are adopted is slow. Despite the governments being vigilant and enthusiastic about the impacts of climate change, the revolution has been long winded.

That said, it’s the private sector that can come up with the required funding and provide the genius minds to bring about a positive change. The introduction of new technology, solutions and products can be done phenomenally well by the private sector.

This also creates huge business potential. Businesses can make money by foraying into the fields that are yet to be explored.

In doing so they will get support from the governments. A huge amount of public funding is being pushed to fight climate change in the form of subsidies and other incentives. The private sector would do well to tap into these subsidies and slash the associated costs.