The business case for climate adaptation in Least Developed Countries (LDCs)
Coastal LDCs are highly vulnerable to climate threats such as rising sea levels, floods, and storm surges. Often, they lack the resources that more developed countries have to adapt to these challenges. Mangroves provide essential natural carbon capture and serve as a highly effective means of coastal protection. Remarkably, they help prevent approximately USD 65 billion in annual losses from floods and storms and are up to 50 times more cost-effective at resisting storms compared to concrete seawalls.
Companies doing business in coastal regions in LDCs are also having to worry about climate risk exposure and show they can deliver positive value to their host countries. These include companies in sectors such as coastal infrastructure, energy and natural resources, maritime logistics and agriculture.
Companies in these sectors are uniquely placed to invest in protecting and restoring mangroves that deliver adaptation value for their businesses, while enhancing their reputation with local communities and host countries and generating blue carbon credits to offset their emissions.
The 3 business returns
Our research shows that companies investing in mangrove conservation and restoration projects can generate business value, including:
Accessing carbon credits
Mangrove ecosystems sequester carbon up to 400% faster than land-based tropical forests and can store it for thousands of years if left undisturbed. Most coastal LDCs have significant potential to develop blue carbon projects: tens of thousands of hectares of mangroves could potentially be restored, sequestering millions of tonnes of CO2.
A growing number of private companies are recognising the carbon sequestration values of coastal ecosystems and supporting mangrove protection and restoration as part of their net zero strategies. For example, in Gambia, Danish sustainable energy company Ørsted supports a community-driven mangrove restoration project which will generate carbon offsets for its net-zero goal.
Reputational benefits and social license to operate
Successful mangrove restoration and conservation projects provide coastal communities with benefits including increased resilience to coastal hazards, better livelihoods and reduced poverty, and increased food security. For example, in Senegal, the restoration of mangroves in the Casamance and Sine Saloum deltas – supported by multinational Danone through its Livelihoods Fund – has enabled communities to increase fish harvests and rice yields, improving livelihoods and food security. It has also created jobs in coastal communities in both the Casamance and Sine Saloum regions, including for women.
Resilient operations and supply chains
Companies operating in or sourcing from coastal LDCs face increased climate risk challenges, with companies in sectors such as offshore oil and gas, port operation and maintenance, and container shipping facing heightened risks of damage to assets and operational disruptions due to coastal flooding and storm surges. Meanwhile, companies sourcing materials or goods – such as agricultural products – from coastal areas of LDCs risk supply chain disruption due to crop damage caused by flooding and saline intrusion.
Investing in mangrove restoration can help companies reduce damages and expenditure on maintaining and replacing infrastructure and assets: as we explained in a 2020 case study, Zephyr Power Limited, an energy company in Pakistan, planted mangroves in the vicinity of a wind energy project in order to protect against coastal erosion. This is projected to save the project an estimated USD 7 million over its 25-year life-span. Companies with similar projects in coastal areas of LDCs could obtain similar benefits and savings as a result of investing in mangrove restoration.
Enabling more private sector companies to act
Earth Security is working with the Global Environment Facility and UNIDO to create a platform that enables many more private sector companies operating in LDCs and other developing countries to reap the benefits of investing in nature-based solutions. The focus is on understanding the company’s own coastal climate risks, identifying opportunities to monetise natural capital around their strategies and operations and partnering with a tailored project pipeline that delivers business value while supporting local communities and host countries.
A pipeline of projects in LDCs is enabling companies to assess direct investment opportunities, creating coastal adaptation benefits for communities while offering the potential to generate carbon credits for business. Get in touch with us on the form below to learn more.
According to the United Nations, the funding gap for climate adaptation in developing countries is 10 times larger than current financing flows. The bottom line for business is that private sector companies operating in vulnerable LDCs can have an outsized impact on their host country, while increasing their own resilience and delivering on their net-zero strategy.
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Contact UsWe are curating a pipeline of nature-based projects in LDCs
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