Climate and disaster risks are creating adverse impacts on the country’s economic sector. Among those who are most directly impacted are micro-, small-, and medium-sized enterprises (MSMEs) and entrepreneurs. To ensure long-term economic recovery and inclusive economic growth, it is therefore important to identify and address climate and disaster risks in this sector and support MSMEs in building holistic climate resilience.

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Understanding risks

Awareness of risks and an understanding of their nature, likelihood, and intensity is the first step to managing risks through evidence-based actions. Developing a baseline on existing climate and disaster risks in Sri Lanka is therefore among the key actions needed to ensure that different actors and entities—such as small businesses and entrepreneurs—are able to address these risks across economic sectors and geographic areas.

A baseline assessment should include a mapping of sectoral entrepreneurship and key risks faced by entrepreneurs in Sri Lanka as well as opportunities for them to contribute to addressing climate-related obstacles and challenges. For different sectors—for example, agriculture, tourism, waste management, or the garment industry—, MSMEs face different risks and have different needs, capacities, available resources, and priorities when it comes to managing them.

Other elements which form important components of addressing climate and disaster risks in an inclusive and participatory manner include awareness creation and capacity-building; exchanging and utilizing existing knowledge and information which could contribute to identifying and implementing solutions; and enhancing the understanding of key stakeholders involved in economic sectors to better adapt to addressing these risks.

Baseline assessments could build on existing avenues for addressing risks, their functionality and impact in minimizing and averting risks, and opportunities to ensure sustainable and successful long-term risk management processes within the MSME sector. 

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Access to information and enabling environment

After conducting a baseline assessment, it is crucial to make the relevant information available and actionable for all stakeholders, including policymakers, entrepreneurs, supply chain actors, and vulnerable groups. To facilitate enterprises shifting towards processes that contribute to addressing climate and disaster risk, it is vital that entrepreneurs and business entities are informed on the need for addressing climate and disaster risks for the sustainability of their enterprise. This includes conducting awareness and climate literacy building activities as well as capacity-building of stakeholders on the importance of climate and disaster risk management in the MSME sector.

It is equally important to ensure an enabling environment is built for entities and entrepreneurs to better engage, identify key risks to be addressed, and introduce solutions that will contribute to holistic and comprehensive, as well as forward looking approaches to build climate and disaster risk resilience in enterprises. 

This could also be supported through efficient coordination and knowledge-sharing processes and platforms amongst all stakeholders for better decision-related to enterprises, taking into consideration the impacts posted by sudden- and slow-onset climate processes and disaster events.

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Mainstreaming climate and disaster risk management

It is important that climate and disaster risk management is integrated into education processes. This could be introduced into undergraduate and graduate trainings related to entrepreneurship as well as formal and informal training and skill development processes related to climate change in the country. TVET and the education sector provide many opportunities to incorporate climate-specific modules, course contents, hands-on training sessions, and education materials.

Capacity-building, trainings, and skill development can help entrepreneurs to better integrate different aspects of climate and disaster risk management into their business models to preemptively address climate-related impacts and challenges at a high scale. 

In addition to avoiding climate-induced losses and damages, effective risk management mechanisms and instruments can provide a chance to strengthen the core business case, optimize for sustainability and resource efficiency, and access new sources of funding and support.

To ensure that everyone has similar access to knowledge, trainings, and capacity-building opportunities, programmes are needed to enhance knowledge and capacities of MSMEs through identified national and local actors. This could contribute to building partnerships with long-term positive results, where entrepreneurial decision-making is conducted with the integration of climate and disaster risks on all levels and across all processes.

Through inclusive and accessible processes, climate and disaster risk could be addressed amongst MSMEs which will contribute to addressing the resilience building, as well as economic empowerment through effective and holistic climate and disaster risk management. 

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Note: The column builds on inputs received from over 40 multi-stakeholder members contributing to the dialogue on climate and disaster risk management of the Partnership on Climate and Disaster Risk Finance,  and key actions identified for sectoral approaches to build long term climate and disaster resilience in Sri Lanka. It has been published on The Morning as part of the author’s weekly column.