Climate resilience, resource efficiency and circular economy - - PowerPoint PPT Presentation

Climate resilience, resource efficiency and circular economy

Support to SMEs in international value chains

By Annegret Brauss 11 June, 2019

ITC helps businesses do good trade

ITC is dedicated to support the competitiveness and internationalization

• f small and medium-sized enterprises (SMEs) in developing countries –

as a vehicle for broad-based sustainable development.

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ITC works concurrently at different levels:

• SMEs
• Trade and Investment Support Institutions

(TISIs) and the institutional ecosystem

• Policy makers & public-private dialogue
• Market partners (e.g., financiers, buyers,

aggregators, technology providers, etc.)

Addressing competitiveness from a Connect, Compete and Change angle

Vision: SME growth = green growth

Companies Environment

• Companies use natural

resources

• Some might produce

emissions or pollute

• Environment provides natural

resources

• Environment can impact

enterprises through change or

• ther related impacts
• Companies and the

environment are in a constant exchange, which can be mutually supportive or detrimental

• Environmental sustainability of

SMEs has become a key requirement from international buyers, consumers and other business ecosystem partners

• ITC provides services aiming

to increase SME competitiveness through enhanced interaction with the natural environment, such as resource efficiency, circular production or climate change adaptation

Mutually positive relationships can enhance enterprise competitiveness

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Mainstreaming Sustainable & Inclusive Development at ITC

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• ITC is currently establishing guidelines

to support the mainstreaming of inclusive, green and responsible trade into all ITC projects

• Principles & guiding questions for

projects in design phase, as well as for implementation and evaluation

• Training for project managers
• Processes & indicators to enforce

mainstreaming

• Guide to be launched in Q3

Promoting Green Growth through SMEs

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Climate Expert Approach

 Climate change adaptation

Resource Efficiency & Circular Production

 Climate mitigation, reduced pollution, circularity Similar methodology for both approaches:

• Direct work with SMEs follows a 4 steps approach:
• Connecting SMEs with business ecosystem stakeholders to enable the

implementation of the strategies (e.g., financiers, technology providers, etc.)

Assessment (risks or efficiencies) Identify measures Compare measures Create strategy

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Both approaches offer direct support for SMEs

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Self-assessments

• Companies to complete an initial survey about their current practices
• Survey results to be used as baseline assessment of each company and to

identify most important areas for action Personalized face-to-face coaching sessions

• Expert coach to work directly with respective SME
• Preparation of business cases for each green project to access finance

Group trainings based on needs assessment

• Topics defined based on needs assessed resulting from direct communications

with beneficiary SMEs Online Trainings for SMEs

• Training on for SMEs going step by step through each approach
• To be hosted on ITC’s SME Trade Academy: https://learning.intracen.org/

Mainstreaming of the Climate Expert Approach

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Methodology

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Study on the climate impact on the targeted value chain Customized coaching programme

• f 6 to 8 months combined

with specialized workshops and e-learning course Implementation of climate adaptation measures

Advantages for SMEs

SMEs/coperatives design a climate change adaptation strategy in order to:

• Ensure continuity of business by taking measures against negative effects of

climate change,

• Strenghten competitive advantage by investing in innovating measures and

increasing production efficiency,

• Lower operation costs by using available ressources more efficiently,
• Improve companies’ reputation to climate change issues,
• Anticipate new regulations in relation to climate change.
• Develop new range of products and services meeting new needs created by

climate change,

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Examples of adaptation measures

• Increasing height of goods stored in warehouse to avoid damage

during floodings

• Change of working hours during heat waves, extreme weather

events, floodings

• Installation of ventilators and insulation of factory building to

lower temperatures during heat waves and ensure productivity levels

• Solar panels and energy storage to ensure energy supply during

extreme weather events (heavy rainfalls and storms) or to substitute wood-based tea drying

• Set-up of parabolic drying beds that facilitate the coffee drying

process

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Awareness raising:

• Skepticism: General skepticism from local companies
• No awareness: A lack of awareness and understanding on climate risks and the

linkage with business operations Coaching programme:

• Conflicting priorities and time pressure of the SME beneficiaries
• Change in focal points assigned to project
• Uncertainty in the assessment of adaptation measures:
• Lack of information, especially localized climate information, technologies, funding
• pportunities
• Lack of willingness of beneficiary SME to share financial data

Implementation of identified adaptation measures:

• A tendency to focus on short-term decisions and resistance to change existing

processes

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Common challenges to overcome

First lessons learnt

• Urgent need for SMEs to build capacity & skills to actively manage climate

induced risks and strengthen financial literacy

• Responsiveness to climate risk management highly dependent on

targeted value chains: agriculture versus manufacturing

• Positive impact of building private sector alliances on non-commercial

issues

• Gap in the offering of TISIs which is traditionally less focused on

sustainability and climate change

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Projects on Resource Efficient & Circular Production Processes (2019-2022)

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GTEX/ MENATEX

• Donor: Sweden and Switzerland
• Sector: Clothing
• Countries: Egypt, Jordan, Morocco, Tunisia

T4SD Hubs

• Donor: Sweden
• Sector: Multiple (e.g., shea, horticulture)
• Countries: Ghana, Kenya, Peru, Viet Nam

Ethiopian Textiles Sector

• Donor: BMZ/GIZ
• Sector: Clothing
• Country: Ethiopia

MARKUP

• Donor: EU
• Sector: Tea and coffee
• Countries: Burundi, Kenya, Tanzania, Uganda

 RECP projects are confirmed to be implemented in 13 countries with 15-20 SMEs in each country in starting in 2019/2020

Methodology – RECP Approach

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Setting a benchmark for resource efficiency and best practices in circular production Customized coaching programme

• f 6 to 8 months combined

with specialized workshops and e-learning course Implementation of RECP measures

Making the business case for climate action

Importance of creating a business case and direct linkage to financing options

• Access to Finance is the most important aspect to implement larger adaptation

measures (Not necessarily only Green Finance)

• Coherence with requirements of finance providers (e.g., banks, impact

investors)

• Cost/Benefit Analysis based on NPV calculation is key as a basis for

investment decisions

• Capacity of SMEs to communicate results to internal and external

stakeholders

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Thank you!

Annegret Brauss Associate Expert abrauss@intracen.org

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