The European Business Council for Africa

The CDC Group publishes its Emerging Economies Climate Report for 2021.

According to the World Bank, climate change has the power to push 100 million people back into poverty in just over ten years, and it will hit countries in Africa and South Asia the hardest.

Countries in these regions are the most vulnerable to climate change, while being among the least responsible for it. In Africa in 2019, for example, nations were already spending around 5 per cent of their GDP on climate adaptation and mitigation measures. With the impact of the coronavirus pandemic holding back growth and climate change becoming more severe, Vera Songwe, Executive Secretary for the UN’s Commission for Africa, said that this situation is likely to get worse: “It is expected that, in the future, countries [in Africa] will be spending about 15 per cent of GDP to respond to climate crises.”

Meanwhile, in Asia, extreme weather is also having a significant impact on economies. McKinsey estimates that temperatures in India, Bangladesh and Pakistan are projected to rise by 2 to 4°C by 2050. And Cyclone Amphan, which badly affected India last year, caused an estimated $13 billion worth of damage.

These challenges present a significant financial risk to businesses operating in these countries and, more broadly, threaten achieving the Sustainable Development Goals. All nations where we invest have committed to the terms of the Paris Agreement, to limit global warming to well below 2°C and pursue efforts to limit it to 1.5°C. So, our focus as an impact investor in these markets is to support the private sector to find the solutions needed for a just transition to net zero and resilient economies by 2050.

There are significant opportunities for green economic transformation in all sectors. The IFC, for example, estimates that investments in green buildings could reach $1.5 trillion in South Asia by 2030 and, similarly, electric vehicles can create a $950 billion opportunity in the region. In Africa, in 2020, the off-grid solar market alone – companies that provide solar home systems on a pay-as-you-go basis – was estimated to be worth $24 billion.

As an investor in businesses and funds in these countries, we wanted to get a clearer understanding of how private sector leaders in Africa and South Asia see climate change. So, we carried out a survey of senior management at businesses and investment funds in our portfolio operating across these regions. We asked questions on how climate affects their firms today, how it is influencing their future plans, and what they need from international investors – such as CDC – as well as the broader international community, as the countries they work in transition to net zero and resilient economies.

This report provides an overview of those results. The responses reveal the realities of managing a business in challenging environmental conditions and the impact climate change is already having:

  • 94 per cent of respondents said that the international community had a duty to support emerging markets to address the impact of climate change
  • But only 12 per cent agreed that the international community was doing enough to support emerging markets to address the impact of climate change
  • 78 per cent said that all international investment in emerging markets has to support the UN’s Sustainable Development Goals
  • 86 per cent said climate change would negatively impact their business over the next decade
  • 82 per cent of respondents agreed that businesses that take steps to reduce emissions and vulnerability to physical climate risks will be better off in the long-run
  • Nearly half of respondents (48 per cent) said they have experienced an extreme weather event that has significantly affected their company
  • Overall, respondents believed the private sector and public sector were equally placed to combat climate change effectively
  • Overall, more respondents were optimistic, than pessimistic, that the world can act together to effectively limit the extent of climate change


The survey was carried out by CDC and our partners at Imperial College London. The questions and format of the survey were structured around and inspired by the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which provides an international framework to help companies disclose climate-related risks and opportunities.


Read the full report here.