In the face of the global climate crisis, societies and economies must find innovative solutions that not only address the sources and impacts of climate change but also allow people to thrive in a shifting environment. Such solutions include policies and national strategies but also mobilization of the private sector, the harnessing of market forces, and public-private partnerships. Particularly in developing and emerging economies, young entrepreneurs can play a critical role in working towards this goal and contributing to adaptive, inclusive, and sustainable solutions.

Entrepreneurs are key for a dynamic and growing economy. They bring new goods, services, or technologies to the market and can act as catalysts for transformative change. Entrepreneurship is focused on building a business from concept to market maturity and beyond, but it does not necessarily contribute to climate action, environmental conservation, or social justice. Therefore, it is important to distinguish between different kinds of enterprises and their role in the context of overarching global, national, and local challenges.

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The concept of climate entrepreneurship

Start-ups and innovative businesses are engines of economic growth and can create income, employment opportunities, products, and many other tangible benefits for their communities and countries. Building on this, sustainable and climate-friendly enterprises focus not only on economic but also on environmental and social aspects, such as reducing their resource footprint or engaging in fair trade, localized supply chains, and energy efficiency.

Climate entrepreneurship goes one step further and puts climate action at the heart of the business case. From this perspective, revenue and clean, green, and responsible business practices are not opposed, but rather complementary to each other. Climate entrepreneurship is about strategic alignment of business goals with the goals of the Paris Agreement, the Convention on Biological Diversity, and the Sustainable Development Goals. It is about looking ahead and planning for a changing climate, for less reliable weather patterns, extreme events, sea level rise, and other climate-related risks. In addition, climate entrepreneurship also aims to identify opportunities and re-imagine problems, as well as to understand the skills, services, and products that are needed to drive climate change mitigation and adaptation.

In the age of climate change, there will be growing demand for energy, particularly clean and renewable energy; for sustainable and regenerative food systems; and for resilient, mobile, and digitalized financial services and systems. Climate entrepreneurship capitalizes on foresight and anticipation, it envisions the challenges of tomorrow and finds solutions for them today. This could be in the energy sector, where there will be a clear momentum to shift towards clean and renewable energy sources; but it could also be about alternative value chains; innovative agricultural practices and alternate protein production; risk-informed planning and infrastructure development; digital solutions and frontier technologies; health and sanitation sector actions in the face of heat waves and shifting disease vectors; nature-based solutions and green infrastructure; or circular economy and waste management.

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Building spaces, pipelines, and ecosystems for entrepreneurship

Enhancing the developments of such start-ups is in the best interest of countries and economies. However, entrepreneurship requires a particular skillset, mindset, and the ability to build networks and ecosystems. Providing opportunities for young people to build these skills and competencies can pay huge dividends down the line and could be a priority for countries like Sri Lanka, which have a large youth population as well as a need to grow, transform, and adapt their economies towards climate resilience and sustainability.

One way to enhance the adoption of entrepreneurial skills is by mainstreaming them into existing education curricula, vocational training, and higher education. However, this alone might not be enough to sufficiently scale up the number of homegrown entrepreneurs. There is a need to connect training opportunities, certificates, orientation programmes, mentoring, and hands-on, practical experience across grades, age groups, and institutions. By creating a pipeline that builds basic capacities and an open mindset for entrepreneurship, those with the right motivation, concepts, and ideas can be facilitated to hone their skills and receive support to work towards their own start-ups.

Young people need space and time to build their capacities through curricular and extracurricular activities, mentoring, and support systems. Furthermore, innovation spaces and opportunities, such as regulatory sandboxes, incubators, accelerators, launchpads, springboards, seed grants, competitions, or partnership programmes, can help them to experiment with setting up a business in controlled circumstances and with the necessary guidance.

Young climate entrepreneurs can be agents of change who address the urgent challenges of climate change, environmental degradation, and the need for sustainable development through their ventures. On the global, national, and local level, creating entrepreneurship ecosystems and pipelines can help to identify and empower young people with the potential to start successful enterprises and support them throughout the different steps, from conceptualizing to producing, marketing, and scaling up. Investing in climate entrepreneurship means investing in the economy as well as in climate action, resilience, sustainability, conservation, and social responsibility.

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This blog post was originally published as a guest column in Daily Financial Times on August 12^th, 2022, and is available here.

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