Linking climate change, sustainable development, and a resilient economic recovery

In the face of climate change, COVID-19, and the current economic situation, Sri Lanka needs to work towards sustainable development and a climate-smart, resilient recovery

In the face of climate change, the aftershocks of the COVID-19 pandemic, and the current economic situation, it is of paramount importance for Sri Lanka to achieve sustainable development and resilient growth. Key considerations towards this goal include entrepreneurship support, sustainability, climate resilience, risk management, and making progress towards both climate targets and the Sustainable Development Goals.

Entrepreneurship, sustainability and green growth

Economic development, diversification, and transformation are needed for Sri Lanka to deal with the acute crises and risks the country faces. Actions towards these goals should happen at all levels, from the local to the national and from macroeconomic policies towards smallholder livelihoods and start-up support. In addition, such actions can greatly benefit from aligning with global climate processes, national climate commitments and the Sustainable Development Goals (SDGs) under the United Nation’s 2030 Agenda for Sustainable Development.

The SDGs acknowledge that ending poverty, climate action, and biodiversity conservation must go hand-in-hand with spurring economic growth, improving health and education, and reducing inequalities. This holistic approach and its key principles are relevant for start-ups as well as corporations, and they should permeate all business decisions to guarantee future-proof development that connects to global trends and builds on their momentum.

Entrepreneurship today needs to be conscious of the need for sustainability and green growth. Throughout all aspects of a business—such as product design, operations, packaging, transport, or marketing—, principles of sustainability should be applied to reduce environmental footprints and resource use. There are opportunities to capitalise on the need for transformation and invest in sectors such as renewable energy, clean technology, alternative forms of mobility, waste management, digitalisation, frontier technologies, and more efficient business practices and methods. The rise of new sectors presents a chance to invest in relevant skills and capacities to foster innovation and paradigm-changing solutions.

With targeted capacity-building and support, entrepreneurs and start-ups across the country can contribute to sustainable economic recovery and diversification. Particularly in rural areas, entrepreneurship can be enhanced by fostering an enabling environment and start-up ecosystem, including institutional arrangements and policies, facilitating social dialogue, investing in skills development, training, and re-training, providing infrastructure and seed funding, and investing in social protection schemes that provide safety for workers, their families, and communities at large.

Climate resilience and mainstreaming risk management

In addition to sustainability, any business—from start-up to large enterprise—needs to acknowledge the complex landscape of risks in the current environment. This includes market-related and economic risks, but also risks related to the ongoing climate crisis, environmental degradation, and disaster events. If businesses are aware of risks, they can mainstream comprehensive risk management into their planning processes and ensure that they are resistant to shocks, incorporate climate considerations, and utilise the full range of risk management instruments.

Risk management and resilience-building should be key components of an economic transition, enabling Sri Lanka to withstand impacts and adapt to environmental changes. This includes physical infrastructure and technological solutions, but also climate-informed planning, risk analytics, ecosystem conservation and nature-based solutions, adjustments to the policy landscape, capacity-building of institutions and the workforce, insurance and social protection schemes, and a variety of other interventions.

In short, entrepreneurs, established businesses, government institutions, and other relevant entities need to act in risk-informed ways that adapt both to a changing climate and the reality of other risks and impacts. By learning from science and experience, risks can be avoided, reduced, or turned into opportunities, for example by adopting innovative practices, new technologies, or connecting traditional and modern knowledge.

Linking SDGs and climate-smart development

Research suggests that climate action has the potential to reinforce all seventeen SDGs, while a failure to act decisively on climate will likely undermine SDG achievements. If economic development and building back better are aligned with both climate action and sustainable development, they can therefore develop strong synergies and avoid negative feedback loops.

Linking climate change and sustainable development also offers an opportunity to leverage additional funding and tap available sources of climate finance. As one of the key focus areas of the global finance discussion, climate finance is available both for mitigation (actions to reduce greenhouse gas emissions) and adaptation, which covers measures to adjust a country’s systems and economy to be more resilient and thriving even in unprecedented environmental and climatic conditions.

As of now, developed countries have not yet managed to live up to their global commitments under the Paris Agreement, which include raising $ 100 billion per year in finance for mitigation and adaptation. However, there is a significant amount of funding available from different sources to address climate change, with tracked climate finance around the world estimated to have increased by 60% since 2013/2014. 

It may seem a daunting task to address climate change and the need for sustainable development while being confronted with severe challenges to the national economy, including the impacts of COVID-19 and global supply chain issues. However, combining economic recovery with climate-smart planning, resilience-building, and progress towards the SDGs it more than a necessity: it also makes a strong business case, both in terms of unlocking additional finance and of the long-term return of investment for profit, people, and the planet.

(The writer works as Director – Research and Knowledge Management at SLYCAN Trust, a non-profit think tank based in Sri Lanka. His work focuses on climate change, adaptation, resilience, ecosystem conservation, just transition, human mobility, and a range of related issues. He holds a Master’s degree in Education from the University of Cologne, Germany and is a regular writer to several international and local media outlets.)