Understanding the adaptive capacity of Australian small-to-medium enterprises to climate change and variability

Abstract Small-to-medium enterprises (SMEs) comprise 96 per cent of all private businesses in Australia. The SME sector is the economy’s largest employer and the largest contributor to GDP. Moreover, SMEs play a significant role within socio-economic systems: they provide employment, goods and services and tax revenue for communities. Climate change may result in adverse business outcomes including business interruptions, increased investment and insurance costs, and declines in financial indicators such as measures of value, return and growth. After natural disasters, SMEs face greater short-term losses than larger enterprises, and may have lower adaptive capacity for various reasons. This study examines the underlying factors and processes shaping adaptive capacity of Australian SMEs’ to climate change and associated sea level rise. Specifically, the research asks the following questions: 1) How have SMEs considered and integrated adaptation into business planning? 2) What are the key underlying processes that constrain and influence the adaptive capacities of SMEs? and 3) What types of support are required to promote SME business continuity under a changing climate? The study adopts theories from Political Ecology and draws on literature on vulnerability and hazards to understand the processes that mediate the adaptive capacity of SMEs. The empirical research involved an online survey targeting SMEs, attending business engagement events hosted by chambers of commerce, 30 semi-structured interviews with secondary stakeholders, five case studies involving SMEs and secondary stakeholders, and finally a stakeholder workshop which brought together participants from both groups. The central conclusion of this study is that underlying contextual processes are critical to enhancing the adaptive capacity of SMEs. These processes include: the social relationships between SMEs and support organisations; the relationships within support organisations themselves; the agency of SMEs to direct resources toward building resilience into business continuity; SMEs’ perceptions of climate risks; and power struggles between support organisations. Unfavourable combinations of these processes have the potential to limit the adaptive choices that SMEs can adopt in order to overcome climate change and other related stresses on business continuity. These processes generate vulnerability and often occur at scales external to the SMEs;including relationships between different tiers of government as well as between various support organisations working with SMEs. These contextual processes have been largely overlooked in formal programmes that aim to build business resilience. The programmes have tended to be reactive and have tended to focus on business recovery during and after disasters rather than on altering the vulnerability context of SMEs through anticipatory prevention and preparedness or adaptation planning. This study suggests that the success of efforts to build the adaptive capacity of SMEs to future climate and related stresses will depend on how they address these underlying processes to facilitate the ability of SMEs to exercise their agency in pursuing adaptive choices that they value

Aurora case study: Pioneering sewage recycling in a greenfield residential development provides many lessons

Title in document's citation: Aurora Case Study; Building Industry Capability to Make Recycled Water Investment Decision

Making better recycled water investment decisions: Shifts happen

Title in document's citation: Making better recycled water investment decisions; Building Industry Capability to Make Recycled Water Investment Decision

Roseville Case Study: Stormwater recycling for urban golf course and oval irrigation

Title in document's citation: Roseville Case Study; Building Industry Capability to Make Recycled Water Investment Decision

Saving water and spending energy?

Title in the document's citation : Saving water and spending energy?; Building Industry Capability to Make Recycled Water Investment Decision

Rosehill case study: Sewage recycling for large industrial customers

Title in document's citation: Rosehill Case Study; Building Industry Capability to Make Recycled Water Investment Decision

Public-private matters: how who is involved influences outcomes

Title on document citation: Public-private matters: how who is involved influences outcomes; Building Industry Capability to Make Recycled Water Investment Decision

Yatala Case Study: On-site industrial recycling improves water efficiency in beverage manufacturing

Title in document's citation: Yatala Case Study; Building Industry Capability to Make Recycled Water Investment Decision

Policy settings, regulatory frameworks and recycled water schemes

Title in document's citation: Policy settings, regulatory frameworks and recycled water schemes; Building Industry Capability to Make Recycled Water Investment Decision

Navigating the institutional maze

Title used in the document's citation: Navigating the institutional maze: Building Industry Capability to Make Recycled Water Investment Decision