SMEs can boost exports, curb carbon emissions and adapt to climate change – but not alone

21 November 2016
ITC News
ITC side event at COP22 sheds light on critical role for aid for trade

Marrakech — Targeted development assistance can help small and medium-sized enterprises (SMEs) in developing countries increase their competitiveness in the global economy while boosting resilience to climate change, according to participants at an event organized by the International Trade Centre (ITC) on the sidelines of the ongoing United Nations climate conference (COP22) in Marrakesh, Morocco.

The 16 November gathering explored the challenges and opportunities facing SMEs.

Said Maghraoui of Ministry of Foreign Trade of Morocco opened the meeting by stressing that “the liberalization of trade should not lead to production and consumption patterns that would harm the environment and the climate. One should not sacrifice the environment in favour of a comparative advantage.”

He cautioned, however, that “SMEs in developing countries would need to receive substantial assistance in order to acquire the technical and managerial capacities that would allow them to adapt to this paradigm.”

A panel of international experts on trade promotion, clean technologies, carbon labelling from business, government and international financial institutions presented views on how SME trade practices can contribute to curbing greenhouse gas emissions and adapting to the effects of climate change.

For example, well-designed standards and certification programmes could help entrench sustainable production practices at the farm level, while helping small producers earn price premiums for deforestation-free sustainable agriculture. Meanwhile, the international firms purchasing from these farmers would benefit from enhanced market confidence - and reduced reputational risks – about the sustainability of their supply chains.

Another key opportunity for SMEs lies in technological upgrading:, by acquiring and developing new clean technologies, SMEs can increase their competitiveness both locally and internationally. Panellists emphasized the importance of financial support for technological innovation. Aid for trade initiatives and other means to support research and development will help SMEs generate new products and services to enter potential markets.

A recurring theme at the gathering was the need for SMEs to better understand climate policy discussions: the 2015 Paris Agreement on climate change, with its targets for emissions reductions and adaptation support, presented opportunities for various sectors of the economy – but businesses must understand these opportunities in order to seize them.

ITC’s Lilia Naas said the “The Paris Agreement provides a new framework and set of commitments to combat climate change. The agreement has implications for trade both at the policy and enterprise levels. ITC is equipped to assist SMEs green their exports and take advantage of the growing demand for green products.”

She explained that ITC’s role at the COP22 summit was to present practical solutions for using trade as an engine of sustainable and environment-friendly growth, and thus to contribute to the success of the conference. “Climate change is an important challenge but can offer opportunities for SMEs in terms of green innovation, creation of green jobs and product diversification,” she added.