Despite becoming a popular refrain in the discourse of most policy areas, ‘private sector engagement’ is often accompanied by a lack of clarity on the roles and responsibilities between public and private sector. Drawing on a review of the small but growing loss and damage (L&D) literature, official submissions to the United Nations Framework Convention on Climate Change (UNFCCC) by Parties and other bodies, and experience from the related fields of disaster risk reduction (DRR) and climate change adaptation (CCA), this study seeks to clarify these roles and responsibilities within the relatively new area of L&D under the UNFCCC.
The study begins by summarising the context, including the recent establishment of the ‘Warsaw international mechanism for L&D’ at COP19, before discussing the wider context of the private sector role in international efforts to manage climate risk. The report then provides an introduction to the concept of L&D within the UNFCCC, the relevance of L&D to the private sector, and the evidence received through the submissions. Key findings from the responses include:
The submissions show a general vagueness when outlining the role of the private sector in L&D and, accepting insurance, there is no mention of the private sector in the submissions beyond its recognition as a stakeholder to be consulted.
Private sector engagement is mainly seen in the context of utilising expertise from developed countries, rather than exploring or fostering domestic links and industries.
Evidence suggests that extreme events have been the primary focus of private sector engagement, rather than the risks and L&D from slow onsets (e.g. climate change hazards), which require significant coordination of international trade and investment flows, as well as incentives to action.
Wider discourse about the roles and responsibilities of public and private actors should be considered in any L&D mechanism, so as to balance questions of efficiency and suitability. International efforts promoting private sector actions in DRR and CCA seem confined to international corporations and their global supply chains; more is needed to develop small-to-medium sized enterprise engagement in developing countries for L&D to avoid the same issue.
A lack of definition and unclear conceptual boundaries between DRR, L&D management, and CCA may be causing confusion amongst stakeholders.
More research is required into the effectiveness of private sector involvement in increasing resilience; lessons should be drawn from similar evaluations in DRR and CCA.