Wed | Aug 10, 2022

Growth & Jobs | It’s critical for businesses to build climate resilience

Published:Tuesday | June 28, 2022 | 12:06 AM
Palmer
Palmer
Farmer Camile Smith says she is making preparation for the rainy season in Niagara, St James.
Farmer Camile Smith says she is making preparation for the rainy season in Niagara, St James.
1
2
3

The country’s premier micro and small business financier, JN Bank, says it is critical for entrepreneurs to seriously consider climate-proofing their operations.

This is important not only to improve their chance of recovering faster from disasters, but to also ensure that they are better positioned to access financing.

Chief of the SME Unit in the JN Bank Small Business Loans Division, Garfield Palmer, says exposure to climatic activities is among the risk factors that financiers take into consideration when appraising business operations, and although it does not necessarily prevent the business from receiving financing, it can slow the process.

“And in business, time is money,” he quipped. “Therefore, businesses have to take these issues seriously to mitigate loss and ensure continuity.”

“We are situated in a hurricane belt, so there is an immediate threat to us that we can’t ignore, and we do see where some of our towns and cities are becoming more and more affected by flooding and other similar activities, so these risks do matter to financial institutions,” he said, pointing out that businesses in agriculture and fisheries, for example, are highly vulnerable, but he noted that even sectors such as entertainment, which are indirectly affected, are at risk.

He said part of the assessment by financiers is to ensure that entrepreneurs have a business-continuity plan that they can execute to mitigate against various risks, including climate activities. Therefore, it is important for entrepreneurs to have a plan in place.

But not many micro and small entrepreneurs have the skill set or resources to build resilience to climatic events, Palmer’s colleague, veteran micro financier and JN Bank SBL pioneer, Thelma Yong, underscored, and, therefore, said it is also important for financiers to provide this kind of support for the businesses that they fund.

“As a company, we have trained businesses on how to prepare for disasters, such as hurricanes, floods and so on and even provided clients with a handbook to supplement what they learned in the training,” Yong said.

“Building resilience is a necessity, especially because of how frequent incidents have become because of climate change – almost everywhere is affected and all year round. The climate cycle has changed significantly,” she emphasised.

Yong noted that in addition to providing training and education, the more than 20-year-old organisation also incorporated technology from its early days to assist with its support to clients.

“We used GPS to provide GIS reports, which were very useful in identifying those areas where, especially micro clients were most vulnerable so that we could work with them to recover quickly,” she explained.

Through a partnership with the Inter-American Development Bank; the Ministry of Industry, Investment, and Commerce; Ministry of Agriculture and Fisheries; and the Development Bank of Jamaica, the JN Bank also offered climate resilience financing at a mere four per cent, which it dubbed the ‘Climate Smart Loan’, targeting mainly businesses in tourism and agriculture for mitigation and adaptation. Although the programme has expired, the bank still have solutions within its suite of loan products tailored to support clients, such as the TEF Loan programme, offered through funding from the Tourism Enhancement Fund; and agri loans to boost the capacity of businesses operating in the agricultural and tourism sectors.

“It’s very important for businesses to take the matter of climate resilience very importantly because climate change is real, and our businesses, especially our small and micro businesses, are extremely important to our economy. The stronger they are, the more resilient we are as a country,” Yong concluded.

editorial@gleanerjm.com