Nick O’Donohoe, CEO, CDC Group, opened the session by emphasising the need to support entrepreneurship and innovation in developing solutions to climate change adaptation and resilience challenges. This sector is emerging against a backdrop of global warming already locked in by historical emissions and in the context of uneven geographic and demographic vulnerabilities. As early-stage companies are increasingly coming to the fore, Nick set the scene for the panel conversation by highlighting the commitment of the CDC Group to increasing the innovation support for adaptation and resilience solutions.
Identifying business solutions contributing to climate adaptation
Around the world, new businesses are continuously emerging. However, identifying those that are specifically tackling adaptation and resilience is challenging as companies do not necessarily self-identify as providing climate solutions. This challenge was echoed by Jorim Schraven, Director Strategy, FMO, Dutch Development Bank, who shared the need for a landscape approach to business identification and support. He gave the example of the Rallying Cry project, a platform for African women entrepreneurs at the forefront of climate adaptation that aims to create connections with the investor community and provide access to capital.
Jay Koh, Co-founder & Managing Director, The Lightsmith Group, agreed to the need to tackle the challenge of identifying the emerging adaptation and resilience solutions providers. He shared the example of Climate Adaptation SME Accelerator Project (ASAP), which aims to identify, integrate, and accelerate small businesses in developing countries that are developing adaptation and resilience solutions. As part of the event, he announced the launch of their partnership with Village Capital to accelerate twenty-four SMEs and startups in Africa, Asia, Latin America and the Caribbean that will each work closely with industry experts, investors, and ecosystem partners.
There is a need to take a systems approach in identifying adaptation and resilience solutions, added Jesper Hornberg, Lead Innovation and Scaling, Global Resilience Partnership. He highlighted the GRP Incubator approach, which since its inception in 2015 has provided mentoring and scaling support to 38 resilience initiatives and innovations. GRP also runs innovation competitions to help surface, test, and scale resilience solutions.
Rosita Najmi, Head of Global Social Innovation, PayPal, shared three key recommendations based on the Framework for Action developed by the Digital Finance for Climate Resilience (DF4CR) Task Force. Firstly, there is a need to look across the spectrum beyond mitigation and explore the intersection of Environmental, Social, and Governance (ESG) criteria and the Sustainable Development Goals (SDGs). Secondly, companies need to assess their core capabilities and break down the silos that sustainability teams sometimes face. Thirdly, there is a need for a coalition approach to bring together digital finance and adaptation and resilience stakeholders.
A showcase of adaptation and resilience solutions
As part of the event, Neil Walmsley, Global Head of International Markets, Climate KIC, introduced a showcase of startups offering adaptation resilience solutions for countries in Africa, Asia, and Latin America, all which came from cohorts mentored and supported by the Global Resilience Partnership, Climate KIC, The Lightsmith Group and the CDC Group. These included:
- Drop Access, who through their VacciBox product offer cold storage solutions for medicine and food. Their solar powered portable fridge supports healthcare centres and remote communities and has the potential to reach over 30m people across Africa.
- AUMSAT provides precision agriculture technologies and has developed a tool to map and predict groundwater availability for farmers in drought-stricken contexts.
- SOURCE aims to tackle the global drinking water crisis through harvesting water from ambient air. The SOURCE® Hydropanel provides an off-grid solution to obtain drinking water.
- RMSI Cropalytics focuses on providing data analytics to support Indian agricultural stakeholders to make decisions. They combine modelling, crop and meteorological expertise to support government, crop insurance, agriculture input sector, commodity trading and social sector.
- Pula is an agricultural insurance and technology company that designs and delivers agricultural insurance and digital products to help smallholder farmers endure yield risks, improve their farming practices, and bolster their incomes over time.
- Abalobi enables small-scale fishing communities to activate Community-Supported Fisheries (CSF) that promote fair market access, transparent supply chains, and broader food security. In South Africa, Fish With A Story represents the implementation of their CSF model.
- Verqor is a fintech company helping farmers access weather information and recommendations to deal with climate shocks, as well as weather insurance. Farmers have access to high quality agricultural inputs, field specifications, as well as support for input application, which they then pay back in crops.
- Mari Oceans develop replicable governance models to rebalance and optimise the seaweed sector in Indonesia.
Growing the solutions sector requires landscape level partnerships
“We need to start financing adaptation solutions in the same way we did 15 years ago for mitigation.” – Jay Koh, Co-founder & Managing Director, The Lightsmith Group
Reflecting on the solutions showcase, the panelists agreed on the need for diverse types of capital, as well as for the overall increase in financing to support the sector of adaptation and resilience solutions to grow. Grants, concessional funding, commercial capital are all needed to accelerate the development, scaling, and uptake of solutions. However, these require collaboration within the funding landscape to ensure the funding is integrated and supports the innovators, as well as the context in which they operate. Taken together, this points to the need for a systemic approach to develop a full understanding of the contextual adaptation challenges, the initiatives required to tackle them, and the funding landscape they in turn need in order to be successful.
The need for integrated funding. Adaptation and resilience solutions are developing in highly uncertain contexts, where we see the effects of climate change worsening; meanwhile, the downscaling of climate models is still in development. Integrated funding approaches are starting to emerge, for example in Vietnam’s Mekong Delta; there, different types of funding are supporting rice and shrimp farming adaptations through providing technical assistance, as well as supporting local stakeholders to collectively manage the impact of climate change on the delta.
The double-edged role of data in adaptation solutions. Data is core to the business models of many of the solutions presented. Managing risks around data protection and privacy requires making sure that business models account for this. This also presents ‘data for good’ opportunities, through exploring (with consent) the ways in which data could be aggregated or used to create new income opportunities for vulnerable populations.
Livelihoods impact as a promising adaptation impact metric. The solutions presented in this event show the ways in which adaptation and resilience impact could be tracked through better livelihood outcomes. Dignity and community ownership play a key role in the success of the adaptation solutions presented and need to be core considerations as the companies look to scale.
From silver bullets to a landscape of solutions. Adaptation and resilience challenges will not be solved by any one startup, while the lack of an integrated landscape of incubators, accelerators, and different types of finance is posing added barriers to entry for entrepreneurs. There is a need to learn from the evolution of the global mitigation solutions sector and build on replicable models such as geographical innovation clusters. Going forward, there’s a key opportunity to connect the innovation, adaptation, and development agendas to create the enabling conditions for a new generation of businesses to thrive.
Speakers:
- Jesper Hornberg, Lead Innovation & Scaling, Global Resilience
- Jay Koh, Co-founder & Managing Director, The Lightsmith Group
- Nick O’Donohoe, CEO, The CDC Group
- Jorim Schraven, Director Strategy, FMO, Dutch Development Bank
- Rosita Najmi, Head of Global Social Innovation, PayPal
Moderator: Chiara Trabacchi, CDC Group