Exploration of the Private Sector Roles Including SMEs in Climate Finance

Abstract

Climate change as a topic has gained great interest all over the world and countries and organizations are increasingly in need of such information as will help in mitigating the adverse effects of climate changes. Some prior research on climate finance focuses on financing, especially increasing awareness on climate changes in discussing how climate finance can be prioritized and remain feasible in the long term. This research aimed to deepen knowledge on the roles played by the private sector including SMEs on climate finance, financial management and environmental sustainability. These areas have increasingly been attracting the attention of researchers and professionals in this field. This research explores the rise of the private sector involvement in climate finance. There however are not many studies that gather and systematize the available knowledge about the issue of SMEs, financial management and the concern with sustainable development in the face of climatic changes. The objective of this paper is to present the results and main gaps from a systematic review of literature together with empirical studies based on the exploration of private sector roles including SME’s in climate finance. The research drew upon both primary and secondary sources including journals, memoirs, published papers, letters and a collection of primary sources within the scope of study. The overall approach of this research was inductive whereby it was concerned with the creation of new body of knowledge from the data that was generated and tested scientifically. The researcher also analyzed the articles published between 2011 and 2015 in the main journal of the area, the Journal of Sustainable Finance & Investment. Key findings were that most prior research dwelt on generation of awareness about changing climates and the increasing research in the area of climate finance sustainability, though most SMEs and the private sector have not actively been participating in the area. The research concluded that the private sector needs to play a greater and non-partisan role in formulating policies, generation of finance and sustaining awareness in the area of climate finance. The key recommendations from this study included a shift from generation of finance to sustainability of the financing solutions that will have lasting solutions to the environment.