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Economic inclusion and the entrepreneurial spirit

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Highly confident, women entrepreneurs still face systemic barriers

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Unlocking the power of small businesses to drive climate-smart inclusive growth

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Small businesses must play a crucial role in solving climate change. They are key drivers of economic output globally and within local communities but are disproportionately vulnerable to the impacts of climate change and face unique challenges in accessing emerging opportunities within the green economy. Globally, the 270 million micro and small enterprises (MSEs1) are 90% of all businesses, generate over 50% of global GDP, and employ 70% of the world’s workforce. MSEs make up a significant portion of supply chains for large corporations and can play a major role in addressing today's sustainability and social challenges, often viewed as engine of ingenuity and innovation.The <a href="https://www.mastercardcenter.org/about-the-center/mastercard-impact-fund" rel="noopener noreferrer" target="_blank">Mastercard Impact Fund</a> has deployed $432 million to organizations working with small businesses and local communities in 104 countries to date, aiming to advance inclusive growth that benefits all segments of society, in 104 countries to date. Climate change poses several risks to the resilience and success of small businesses, while also offering opportunities within the transition to the green economy. We must urgently reduce the climate risks facing MSEs, as well as accelerate their ability to deliver climate solutions.

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Shared Economic Prosperity - Small Businesses and Climate Change

This report seeks to add to the evidence base for the importance of MSEs as climate solutions providers, to bring attention to the strategies that are successful in doing so, and to drive resources to support small businesses tackling climate change around the world.Through desk research, interviews and roundtable discussions with those working with MSEs, this report spotlights that data, capital and wrap-around support are key solutions to unlock the power of MSEs to accelerate climate-smart inclusive growth, underpinned by digital financial access.• Data to minimize risk and to enable MSEs to tap into new market opportunities.• Capital to address climate risk, such as adequate and affordable insurance, and to access climate solutions opportunities (e.g., de-risking tools, affordable credit and debt, carbon finance).• Wrap-around support to MSEs, such as training, digital financial inclusion or market access tools.

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Shamina Singh

President & Founder, Mastercard Center for Inclusive Growth

In addition to further discussion of each of these solutions, we feature specific case studies already delivering these solutions around the world for people and planet — some using data, capital or wrap-around support one at a time, but often activating these in combination. For example, some case studies show how data can be used to make insurance affordable, or how accessing capital can deliver climate mitigation and adaptation simultaneously, such as by improving agricultural practices which deliver soil health and therefore increased resilience and carbon sequestration for climate mitigation.Those of us working to advance climate solutions must prioritize MSEs in our strategies, and those in inclusive economic development need to bring a climate lens to our work, addressing the risks and opportunities climate change poses to our efforts. Let us each, as philanthropists, investors, service providers, NGOs, corporations and governments, come together to resource, scale and replicate solutions with urgency to prepare MSEs for climate impacts and enable them to be agents of climate-smart inclusive growth.<a href="https://s3.us-east-1.amazonaws.com/centerforinclusivegrowth.imagery/pdfs/Unlocking_the_power_of_small_businesses_to_drive_climate-smart_inclusive+growth_November_2024.pdf" rel="noopener noreferrer" target="_blank">Download the report.</a>

We seek to add to the evidence base on the importance of MSEs as climate solutions providers, bring attention to successful strategies, and drive resources to support small businesses tackling climate change around the world.