Climate catastrophes like droughts and increased hurricanes, wreak havoc on small business owners' finances. Yafa Cafe was just one of many New York restaurants that had to temporarily shut down their business after 2021’s Hurricane Ida. “[The flooding] was a hard stop on everything because we had just lost a bunch of our inventory,” says Hakim Sulaimani, the cafe owner and Wix user.
While the Brooklyn cafe’s customer base and local community was able to raise $20,000 for the cafe in six hours after the hurricane, the “slow drip” of climate change—or the increased day-to-day costs that come from environmental changes — can hurt long-term financial outlooks just as much as the floods. For example, Yafa Cafe imports its main product, coffee beans, from Yemen which has been facing droughts for years.
“Importing beans is already a process and from a war-torn country,” Sulaimani says. “But the supplies are low [due to droughts] and it makes it twice as difficult to create a space where this coffee is accessible to everyone. What happens is that coffee is sold at really expensive [prices], at least good coffee.”
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A 2021 survey found that two-thirds of small to medium-size businesses worry they don’t have the right skills and knowledge to handle the impact of climate change in their industries. Even if they can recover from disaster, they’re not able to reach their own long-term sustainability goals due to a lack of skills and understanding (63%), funding (48%) and time (40%), the survey found.
Initiatives like Climate Fit, a collaboration between several organizations like the United Nations and Oxford University, aim to bridge the skills gap. This hub brings practical tools and free online training courses (with 20 minute videos) to small and medium-size business owners. Topics include helping them secure green financing, promoting employee education and incorporating sustainable marketing into their strategy after they start a business.
In terms of funding, many US businesses are seeking to build more sustainable operations. According to Bloomberg, sustainability-linked loans hit a 292% increase in May 2021 compared to all of 2020. There are current government grants—for example, the State of California has a directory of grants available to businesses who want to manage their emissions.
Time, however, presents a more difficult hurdle. Shirel Berger, owner and chef of Opa Restaurant in Tel Aviv, says she’s spending more of her time figuring out supply chain substitutes for things that were once abundant. “The winter [in Israel] isn’t cold enough, so we don’t get enough olives on trees or nectarines and plums for the summer,” she says.
So far, she’s mitigated this by working with organic small growers and developing a “dynamic menu,” never serving the same dish each season. But there’s the question of how long this innovative stopgap plan will remain sustainable. “I do think that it’s going to be harder to find produce,” she says.
Berger’s plant-based menu keeps the fine dining restaurant’s greenhouse gas emissions down, however, this determination is not always compatible with her business’s demands: “We really try to source local and pollute as little as possible, but it’s not 100 percent.”
Left with little choice, small businesses are adjusting to the effects of climate change, but Sulaimani says many owners are still missing an opportunity to better engage with their customers:
“We live in an age of conscious consumers… I think most of our customers really appreciate understanding what’s going on around the world, supply chains, where their products come from, and what are the factors impacting that. It’s a learning lesson for everybody.”