ACCORDING to a recent KPMG report titled 'Net Zero Readiness Spotlight: Islands Report', small island economies, including those in the Caribbean, lack the funding necessary to significantly tackle climate change.
The report, which assesses 36 countries on their preparedness and ambition to achieve net zero, also asked decision-makers from 24 global investment institutions about the role of capital markets in climate change adaptation.
While the majority of the investors who were interviewed said that net zero is an essential feature of their investment portfolios, only 37 per cent have invested in small island economies (SIEs) so far and 63 per cent have yet to consider them as a favourable destination for their assets.
The report also revealed that a significant 83 per cent of capital owners are not aware of many investment opportunities associated with SIEs, with 63 per cent indicating that there is an insufficient track record on returns for such opportunities and thus a clear exit strategy is needed before committing capital.
"Now more than ever climate change is a growing concern for the Caribbean," said Raymond Campbell, head of advisory for KPMG in Caricom.
"Our ability as a region to attract capital to fund climate change mitigation and adaptation has never been more urgent, especially considering how our economies and livelihoods are affected by changing climate due to rising sea levels, increasingly frequent and more powerful storms, reduced access to drinking water and damage to ecosystems," he added.
To enhance the appeal of SIEs as a destination for climate-specific private capital, 88 per cent of investors say that they would like to see credible net zero national strategies and 67 per cent would like to see countries adopting international standards to monitor progress on blended finance projects.
A further 87 per cent are concerned about political instability, which could cause business instability and another 68 per cent perceive there to be a lack of projects on renewable energy and carbon sinks in SIEs.
On the matter of current climate change in Jamaica, the report highlights strategies that are being deployed.
"Jamaica has cut greenhouse gas emissions by 11 per cent between 2008-2018, they are working to introduce electric vehicles and is expanding their use of solar and wind power," the report explained.
The report also highlights that SIEs are on the right track, but climate change needs to be at the top of the agenda of every investor, government and business as the world unites to cut global warming to as close to zero as possible.
The Net Zero Readiness Spotlight: Islands report was developed by KPMG in collaboration with CREATE-Research.