World Resource Institute

Question Eight: The Private Sector

How can national-level governments learn from the private sector and encourage investment and decision making to promote the public good in a changing climate?

As adaptation needs intensify around the world, and investment and implementation costs become apparent, there is growing interest in engaging the private sector in these efforts. With the potential to increase investment capacity, creativity and innovation, the private sector is a prospective partner who can multiply the impact of government, development agency and civil society efforts. Corporate experience and practices in managing risk may also help inform decision making for climate adaptation by these other actors. For example, whilst companies require certainty to make long-term investments, some have developed tools and approaches to moderate the risks of an uncertain economic environment, such as volatile fossil fuel prices, exchange rate fluctuations, and other market instabilities, and have become adept in managing change. These provide lessons from which the public sector might usefully draw.

In addition to bidding on government-led adaptation investments, such as new infrastructure projects, the private sector will play a major role in shaping adaptation efforts by integrating climate risks into their own planning processes and investments. For example, companies could, by adapting their own operations, help protect critical global markets from disruption —especially those sectors that utilize natural resources and depend on critical ecosystem services, such as steady water supplies. Some may even find new business and investment opportunities that promote economic development by incorporating climate adaptation priorities into growth strategies.

To what extent, and precisely how, the private sector will respond to a changing climate, is at present an open question. Corporate responses may strengthen vulnerable communities. Or they may ignore or misinterpret adaptation needs, resulting in activities and investments that instead run counter to the public good. As governments seek to build climate-resilient societies, their efforts to facilitate behavior and activities by companies that promote ‘positive’ adaptation can help shape the direction of private sector actions.

This paper series for the World Resources Report asks expert authors to consider the overarching question: How can national-level governments learn from the private sector and encourage investment and decision making to promote the public good in a changing climate?

Within this context, we pose the following sub-questions as possible areas to explore in your responses.

- How does your company manage risks, especially risks characterized by uncertainty, like impacts from climate change?

  • What public policy incentives would enable your company’s adaptation program to support and enhance a developing country's national strategy to adapt to climate change impacts?

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Expert Perspectives

Helmy Abouleish, Matthias Keitel, and Philipp Maximillian Boes - SEKEM: Egypt is a typical example of a developing country which is highly vulnerable to climate change and faces numerous threats to its economic, social and environmental sustainability – including energy...» Read Full Paper

Elizabeth Cheney - Shell: The author explains how Shell actively encourages governments to help build an understanding of today's energy reality, the facts around future supply and demand, and the need for a framework within...» Read Full Paper

Fabio Abdala and Libby Archell - Alcoa: This paper describes in detail Alcoa’s approach to sustainable development in relation to its bauxite mine at Juruti in the Brazilian Amazon. A proposed model for mining and local development in the...» Read Full Paper

Samantha Putt del Pino, Monika Kerdeman, Eliot Metzger, and Sally Prowitt - World Resources Institute: This paper argues that private sector support of adaptation efforts will be contingent on the strength of the business case to commit time and resources for long-term climate resiliency...» Read Full Paper

Dan Bena - PepsiCo: This paper argues that in terms of promoting the public good and public-private sector collaboration in the context of water-, food-, and climate insecurity, two opportunities for national and state-...» Read Full Paper