Climate-resilient Investment in Fragile and Conflict-affected Situations: Opportunities for Business?

Climate change exacerbates risk in fragile and conflict-affected situations (FCS), deepening vulnerabilities, disrupting livelihoods and heightening the risk of violent conflict. These dynamics create a vicious circle that undermines resilience, peace and stability, while also affecting business operations and global supply chains. The business sector has a critical but underexplored role in promoting climate resilience and peacebuilding in these contexts. This research policy paper highlights the role of businesses—from local small to medium-sized enterprises to multinationals—in investing in resilience-building initiatives and innovations that strengthen local economies, reduce conflict drivers and open new markets. Businesses, however, face major obstacles in FCS, such as insecurity, weak governance, reputational risk and lack of growth capital. Governments, donors and financial institutions can de-risk fragile markets and build enabling ecosystems for peace-positive investment. At the same time, businesses should embed conflict sensitivity, forge equitable local partnerships and treat resilience as a core business strategy.