Making the case for climate action as an economic development opportunity
How to ensure that climate action is embedded into your city’s economic development, business support and partnerships strategy
What you can learn from this page
This page demonstrates how cities can turn climate goals into local economic opportunities by moving climate action out of environmental silos and integrating it directly into economic development functions like business attraction, permitting, tax incentives, and workforce training. Using the 5Ps framework (Policies, Plans, Processes, Places, People), it illustrates how aligning city operations across departments and actively collaborating with private sector partners, local businesses, and trade unions accelerates green technology adoption, builds resilient supply chains, and drives long-term job growth.
Climate action and economic development go hand in hand
Climate, green, and cleantech sectors (products, services and innovations designed to help the environment and reduce pollution or waste by using energy and resources better) are often the fastest-growing industries in cities. World Economic Forum research models a net gain of 9.6 million jobs globally by 2030 driven by the green transition, with approximately five new green roles created for every single traditional role phased out.
GCoM and C40 research has shown that if cities implement their Climate Action Plans, it will result in a dramatic increase in demand for key green products – such as solar PV cells, EVs, construction materials, heat pumps, and nature-based solutions. Global urban demand for key green products could increase 825% on average, by 2050, as cities fully implement the climate policies they have already adopted. This is equivalent to an increase from nearly US$300 billion in 2025 to US$2.7 trillion in 2050. Capitalizing on this demand through your local economic development strategy can help secure green economic growth and improve resilience against increasing climate risks and hazards.
How to embed climate action across economic development and business support services
While climate and environment departments often set the broad vision and strategy for city climate action, other departments play a key role in ensuring its delivery. Economic development departments and business support services act as the primary bridge between local government and the private sector. Embedding climate action into the daily operations, budgets, and policies for all city departments is important. But securing long-term economic development, business growth, and support comes when that action is integrated into teams that focus on economic development.
Economic and growth plans that encourage business growth, set out plans for business/industrial zones, investments and capital projects can also be hugely important for defining cities’ long-term plans and intentions. These can impact the growth of green businesses, construction of clean infrastructure and decarbonisation of commercial activities. With cities facing increasing risks from climate impacts, factoring this into plans is key to maintain economic resilience.
The table below outlines the 5 Ps (People, Places, Policies, Plans and Processes) that should be aligned and actioned for climate action implementation:
Checklist for Economic Development Teams
Cities have a wide variety of structures and functions when it comes to economic development and business services. The table below outlines just some of the ways that traditional economic development functions can embed climate action into their everyday services.
| City Economic Development / Business Services Functions | Traditional Support | Examples of support that embeds climate action |
| Business Attraction | Focuses predominantly on job counts, investment size, and tax base expansion. | Prioritizes cleantech industries; incentivizes and/or requires incoming commercial projects to present Scope 1 and 2 reduction roadmaps. |
| Business Retention and Expansion | Tracks revenue growth and corporate real estate expansion. | Conducts climate risk and decarbonization audits |
| Entrepreneur/Startup Support | Offers standard business planning, pitch prep, and access to general seed funding. | Focused programming on growing climate-forward businesses, ensuring climate integration to business plans, incorporating circular business models and creating ecosystems |
| Business Permitting and Licensing | Processes permits based on basic safety and zoning codes, treating environmental review as a separate regulatory hurdle. | Fast-tracks green projects (e.g., solar, retrofits, heat pumps) while integrating climate risk reviews and energy targets into standard approval processes |
| Business Grants, Subsidies and Tax Incentives | Awarded based on financial returns, capital expenditure, or job creation numbers. | Ties financial perks to green performance (e.g., energy efficiency ratings, waste reduction, local green hiring). |
| Access to Capital and Financing | Refers businesses to standard commercial bank loans or basic SME funds. | Manages local green revolving loan funds; connects SMEs to green bonds and clean energy micro-loans. |
| Workforce Development and Training | Trains workers based on current employer labour demands regardless of sector impact. | Co-funds and prioritises upskilling programs for green trades (EV maintenance, heat pump installation, building retrofits). |
| Industrial Land Use and Infrastructure | Zones commercial parcels independently with standard utility services. | Establishes Eco-Industrial Parks with shared waste-to-energy loops, microgrids, and centralised logistics. |
| Trade and Export | Helps local firms enter global markets without evaluating supply chain footprints. | Prepares local exporters to navigate international carbon border adjustments (e.g., EU CBAM) and green certifications. |
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