Discussions about climate change in South Africa often focus on agriculture, as this is where the consequences of environmental shocks are most evident. The main focus is on droughts, floods, reduced yields, and heat stress affecting livestock. This is because the agricultural sector is directly exposed to extreme weather events.
}))However, food systems encompass much more than just agricultural production. Between farms and consumers is the agro-processing sector. It consists of enterprises that transform raw agricultural goods into finished food products through processes such as cleaning, milling, canning, packaging, storage, and manufacturing.
This sector links agricultural production with markets, retailers, and households. In South Africa, agro-processing accounts for about 25% of the national output and provides over 300,000 direct jobs.
The agro-processing sector is particularly sensitive to climate risks because its operations depend on a stable supply of agricultural raw materials (crops and livestock). This makes it extremely vulnerable to disruptions caused by droughts, floods, heatwaves, and other extreme weather events.
Researchers conducted a study in the industrial hub of Gauteng, South Africa, to find out how businesses in this sector manage climate risks and what steps they are taking to adapt. This provincial center was chosen due to its significance for food processing, logistics, and distribution in the country. Disruptions in agro-processing affect not only the province but also food availability, supply reliability, employment, and food prices across South Africa.
The study involved interviews with 113 agro-processing enterprises. Participants were asked whether they were aware of climate risks, what they could do to adapt, and what prevented them from doing so.
Key findings showed that formal education is a strong determinant of climate change adaptation. It was found that agro-processing businesses whose owners have a university education make more informed decisions and implement climate-aware practices. Meanwhile, most available training proved ineffective because it focused on production and business management rather than understanding climate risks or ways to respond to them.
Researchers concluded that mere participation in agro-processing is insufficient to advance climate change adaptation; education plays a crucial role here. Other factors, such as age, gender, education, and business experience, had a limited impact on decision-makers' adoption of adaptation measures (such as water conservation, use of energy-efficient technologies, improved storage methods, or diversification of raw material suppliers).
The study included enterprises involved in grain milling, meat processing, dairy production, fruit and vegetable processing, as well as poultry farming, bakeries, and food manufacturers. It was found that these businesses suffer greatly from climate-related disruptions because they rely on crops, livestock, and other agricultural raw materials, as well as water and energy.
Business owners reported that major challenges include water scarcity, rising temperatures, irregular supply of agricultural resources, and increasing production costs. Some companies have taken steps to combat climate change, such as starting to conserve water. They have also expanded their product range to include more long-life processed foods. Operational adaptation included changing work schedules during intense heat, improving ventilation and cooling, and using water more efficiently.
Nevertheless, many struggled with further action due to lack of funds, technical support, and access to reliable information about climate threats.
The study results indicate that agro-processing enterprises in Gauteng need greater support to understand climate change and prepare for its consequences. This support should include better access to information and practical training programs. This will help businesses respond to growing climate risks.
Assisting businesses in adapting should not only be the effort of individual companies. Climate change adaptation must be integrated into existing support programs, such as training, education, and consultation, rather than being treated as an optional extra. Such assistance is usually provided through government extension services, industry groups, and small business support programs.
Any planning for the industry and food production sector must include such training, especially as climate disruptions become more frequent and costly.
Access to climate-focused education, practical training, and technical assistance will be paramount. Many business owners recognize the risk posed by climate change, but awareness of the problem does not always equate to knowing how to respond. Practical guidance, planning tools, and expert advice can help businesses move from short-term measures to long-term preparedness.
Access to financing is also critical, as climate change adaptation requires capital investment. These funds can be directed towards new equipment, infrastructure, or technologies that help cope with changing conditions such as heatwaves and floods. Simultaneously, basic public services must be improved: reliable electricity supply, stable water supply, and functioning municipal services are vital for agro-processing businesses in Gauteng. When these systems are unreliable, it is much harder for businesses to prepare for and respond to climate change.
The study also showed that greater support is needed for women-led enterprises, as women face greater difficulties in accessing finance, technology, market access, and climate information. Preparing agro-processing enterprises for climate change is not only an environmental issue but also a matter of protecting food supplies, supporting jobs, and strengthening the economy.
The current geopolitical crisis is exacerbating South Africa's existing economic difficulties, which stem from the country's dependence on an energy system vulnerable to global shocks and supply chain disruptions triggered by conflicts such as the war between the US, Israel, and Iran.
Against the backdrop of this conflict stands an existential and escalating climate crisis that demands not only technological innovation but also a fundamental overhaul of governance and financial architectures to advance development and growth. According to the 'Climate Finance Landscape Report, 2025' by the Presidential Climate Commission, South Africa, as the continent's most industrialized economy, attracts about 60% of its climate finance domestically, indicating a strong financial sector.
Nevertheless, the annual investment gap required to meet Nationally Determined Contributions (NDCs) and net-zero targets amounts to a substantial 203–404 billion South African Rand. Existing funding streams are heavily skewed towards energy, particularly renewable electricity, which accounts for 74.1% of tracked financing, while adaptation remains at only 11.3%. More tellingly, 78.2% of financial instruments consist of market-rate debt financing (45%) and equity capital (33.2%).
This reliance on commercial debt places the burden of transition onto balance sheets, a model ill-suited for community-level initiatives that lack collateral, credit history, or stable income sources in their early stages. Funding explicitly labeled as 'just transition' remains modest—averaging only 16.8 billion Rand annually—and primarily comes from governments and Development Finance Institutions (DFIs). The market itself does not ensure fairness.
Just transition is viewed not as a secondary issue, but as a normative foundation focusing on decent work, social inclusion, poverty eradication, and participation in decision-making. It envisions decentralized, diversely owned renewable energy systems and equitable access to resources. However, when climate finance is dominated by commercial players seeking risk-adjusted returns, the most affected communities, such as in coal regions like Mpumalanga, end up being either observers or, at best, recipients of symbolic programs.
Since the real impact of climate—rising temperatures, intensified storms, floods, and water scarcity—is ignored by aggregated financial flows, a targeted financing ecosystem that prioritizes community agency is necessary. A presentation on financing green initiatives at the community level in Africa, based on the South African experience, reveals a critical paradox: despite the growth in climate finance, it deeply diverges from the principles of just transition.
If the goal is to empower vulnerable groups—the poor, women, and youth—then the prevailing market-driven mechanisms are not merely insufficient, but structurally exclusionary. Data from South Africa demand a decisive shift in course: from debt-based, top-down investments to community-based, bottom-up resilience. The case of Mpumalanga serves as an example: as a province facing severe climate disruptions and the gradual phase-out of coal, its economic diversification should not depend on abstract market forces.
The true potential lies in creating region-specific value chains: critical mineral processing, green manufacturing, electric vehicle supply chains, green hydrogen, low-carbon fertilizers, and others. These sectors promise millions of new jobs, protection of existing ones, poverty reduction, and the prevention of thousands of premature deaths. Nevertheless, this potential will remain unrealized without a well-designed financing system that prioritizes community agency.
Socially owned renewable energy offers a compelling alternative to the current ownership structure in the energy generation sector. This requires appropriate governance structures, involvement in site selection, and crucially, a financial nexus that extends beyond traditional bankability, actively involving communities or workers in the local economy, thereby deepening economic democracy.
The central thesis of this article is that 'bankability must be redefined.' For community-led green initiatives, the project financing mechanism should not begin with commercial loans. It should start with grant funding for developing business cases, preliminary feasibility studies, comprehensive viability analysis, and preparation for bankability. Only then should concessional loans, blended finance, and finally, commercial debt be introduced.
This sequential approach to risk mitigation recognizes that community initiatives are not failed commercial ventures, but public goods with long-term social, economic, and environmental returns. Existing climate finance, obsessed with immediate risk-adjusted returns, systematically undervalues these co-benefits. Furthermore, adaptation finance—the forgotten child of climate flows—must be radically increased and redirected toward community-level actions. Adaptation is inherently local: early warning systems, drought-resistant agriculture, flood-resilient infrastructure, and water conservation cannot be designed remotely. Yet, at only 11.3% of tracked finance, adaptation remains a secondary concern, forcing communities to absorb shocks that strategic investment could mitigate.
Achieving a just transition in Africa requires more than just increasing the volume of climate finance; it demands a paradigm shift regarding who makes decisions, who benefits, and who bears the risks. The data from South Africa serve as a stark warning: commercial logic alone entrenches inequality. Policymakers, development institutions, and philanthropists must prioritize grant-based technical assistance, establish just transition conditions, and create dedicated funds for community-owned renewable energy and adaptation. Without such measures, the transition will be neither just nor sustainable. As the final slide of the presentation reminds us, community agency is not a charitable add-on, but the missing engine of transformative change. The question is no longer whether to finance green initiatives, but how to finance them justly.
