Opportunity’s clients are amongst the most vulnerable to a changing environment. Here’s how we are building resilience and planning for future generations.

Climate change is a chronic challenge for the poorest people that will long outlast the pandemic. It ‘threatens to undo the last 50 years of development, global health and poverty reduction,’ according to a United Nations report.

It could push more than 120 million more people into poverty by 2030 and will have the most severe impact in poor countries, regions, and the places poor people live and work, said Philip Alston, UN Special Rapporteur on extreme poverty and human rights, and author of the report.

While people in poverty are responsible for just a fraction of global emissions, they will bear the brunt of climate change, and have the least capacity to protect themselves. 

“Many of our clients have already seen negative impact on their livelihoods through reduced agricultural yields resulting from increasing temperatures and more variable and extreme rainfall (flooding and drought),” says Calum Scott, Global Impact Director, Opportunity International Australia.

Our partners in India and Indonesia have seen severe storms impact an increasing share of their clients in recent years.

“A lack of savings can mean that assets must be soldor food, education or medicines foregone in the face of an extreme weather event,” says Calum.

Building climate resilience across our programs

Since 2019, Opportunity has been involved in research in Rwanda which informs our climate strategy by identifying client needs and how we can best serve them.

“We are seeing a need for better weather forecasting for agriculture clients, and training on how to adjust crops and farming techniques to better cope with a changing climate. We are also looking at how we can equip our partners in all countries to better manage climate risks and adapt financial products to best fit clients’ needs,” says Calum.

The learnings are translating into Asia in a number of ways. Our partner ESAF in India is engaged in environmental reporting and providing credit for clean energy products; Cashpor in Green Micro loans (reduced interest if the borrower tends a gifted tree to maturity); and Satya/Pahal have recently accessed US$18m in reduced-interest loans to fund agriculture and livestock insurance. We can build on these examples by implementing a climate resilience strategy across our network.

Opportunity’s Principles on Climate Change

1. Locally led solutions

Local communities on the ‘frontlines’ of climate change rarely have a voice in the decisions that affect them. Though we can confidently say that climate change will impact the majority of our clients, the specific risks and impacts vary significantly from area to area. Opportunity is endorsing the Principles for Locally Led Adaptation, a global initiative to ensure that local communities and households are involved in the design of solutions.

2. Adding green microfinance to best practice

Ninety-five per cent of our implementing partners report annually on their compliance with industry best practices. Green best practices which are essential for clients will be added to this framework in the next six months, along with training for partners. “This will be a step in promoting awareness across partners of the need to assess climate risks and the potential to promote climate resilience,” says Calum.

3. Measuring and managing climate risks

From the climate change research in Rwanda, we will provide an evolving toolkit and resource base for partners. This will help them identify, manage and report on climate risks. It will also help them identify opportunities to expand programs and services, for example, counting 'green jobs'.

Opportunity’s mission is social justice and uplifting the most vulnerable. Climate change emphasises the intergenerational dimension of this work.

“We need to take action now to reduce the impact of climate change on future generations and to equip them with the skills and resources they need to thrive in a changed, and changing, environment,” says Calum.

“The best research and modelling shows that the scale of the future benefits from taking action on climate change far outweighs any sacrifice made now.”

Opportunity’s SPM team presented at the World Forum on Climate Justice in Glasgow from 21-23 September 2021 on The Role of Microfinance Providers in Promoting Climate Resilience in Vulnerable Communities.

For more about how Opportunity measures impact through our Social Performance Management program.