New analysis method: Economic assessment of climate impacts on Indian SMEs

adelphi has expanded the well-tested and frequently used “Climate Expert” approach to now include an economic assessment of climate risks. On behalf of the GIZ, together with local businesses, adelphi researched which financial losses can be avoided through early adaptation measures.

09/10/2014

In the coming years, climate change is going to bring about enormous changes in the business environment of Indian small and medium-sized enterprises (SMEs). Negative effects such as damages from stronger and more frequent storms or water shortages through increased droughts and longer hot spells represent commercial risks which businesses in India need to start dealing with today already. At the same time, changing climate conditions and the accompanying market changes are creating opportunities for new products and services which Indian businesses can offer.

In order to help Indian SMEs identify these climate risks and opportunities, adelphi, on behalf of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), developed the “Climate Expert” approach, a method of analysing measures for adapting to climate change. This well-tested and frequently used approach has now been expanded to include a component for economically assessing climate risks and opportunities. This expansion makes it possible to estimate which financial losses resulting from climate change can be avoided through early adaptation measures. adelphi tested this new component through two pilot studies involving Indian SMEs and also introduced representatives from Indian SMEs to the new analysis method by means of workshops.

A workshop in Delhi with Indian advisory institutions specialising in the area of climate change and the private sector served to help choose an institution that will be responsible for further disseminating the “Climate Expert” approach in India. Furthermore, there were visits to a pharmaceutical company in Hyderabad (Andhra Pradesh) and a textile company in Ludhiana (Punjab).

The information gained will now be used to create case studies for economically assessing the risks and opportunities facing SMEs as a result of climate change. In addition to the specific business analyses, the “Climate Expert” approach with the new economic assessment was shared with other businesses in Hyderabad and Ludhiana (Punjab) through two workshops.

For more information, please visit www.climate-expert.in