Phillips Explores the Impact of Climate Change on Small Businesses
Washington, D.C.— Today, Rep. Dean Phillips (D-MN), Chairman of the Subcommittee on Oversight, Investigations, and Regulations, held a hearing examining the role of the Small Business Administration (SBA) and small firms in fighting climate change. In 2021, historic floods, record temperatures, and blazing wildfires have wreaked havoc on communities, posing a significant threat to small businesses nationwide.
“Investing in energy infrastructure improvements or preparing your business for future weather events can be costly endeavors, that’s why the SBA’s programs must ensure they are setup to help small businesses confronting the reality of the climate crisis,” said Chairman Phillips. “Climate change is a historic crisis, but one that presents numerous opportunities. By crafting programs that provide proper support for small businesses as they adapt and innovate, we can help protect our planet and lay the groundwork for many small businesses to thrive.”
(Watch the Hearing: Exploring the SBA’s Role in Climate Solutions)
According to experts, climate change has the potential to cost the U.S. up to 10.5 percent of its GDP by 2100. With small firms making up 99 percent of all businesses and a large portion of the renewable energy sector, they will play a substantial role in America’s transition to a green economy and the fight against climate change. Thus, addressing climate change through green energy can benefit small businesses, their employees, and the economy as a whole.
During the hearing, members questioned small business owners and experts on the significant threats and opportunities that climate change poses for small firms. Lawmakers also surveyed ways SBA can increase capital access to support small businesses to adapt, innovate, and thrive as the climate changes.
“Like manufacturing, green energy projects and materials are capital intensive, and borrowers often come to us for both real estate, real estate enhancement, and equipment needs. At one time, a CDC could split project costs into two loans for a borrower to finance projects in manufacturing and other capital-intensive fields,” said Laurel Walk, Chief Lending Officer at Colorado Lending Source, Ltd. In Denver, Colorado. “SBA is no longer allowing this practice and as real estate and construction costs continue to rise or even maintain current levels, there will be a greater need for businesses trying to scale and grow."
“The climate is changing for the worse, and marine businesses need bolstered resilience to support the historic growth in demand for recreation opportunities and keep the boating economy churning,” said Rick Chapman, General Manager and Certified Marina Manager (CMM) of The Port of Sunnyside Club, Inc. in Stillwater, MN. “With rising construction costs and increasing severity and frequency of natural disasters, small businesses in particular need support so they can invest in cost-saving mitigation activities to fortify themselves against the impacts of climate change.”
“Small businesses comprise more than 99 percent of U.S. companies and employ 47.5 percent of American private-sector workers. In the energy efficiency, renewable energy, and natural gas sectors, small businesses employ an estimated 70 percent of workers,” said Dr. Lynn Abramson, President of the Clean Energy Business Network. “Both as energy consumers and providers, these small firms are a critical player in our nation’s response to climate change.”