Resilience Amidst Uncertainty
El Nino and preparing for extreme weather by investing in climate resilience
By Camilla Nestor | November 4, 2026
The Iran War may have dominated headlines for much of 2026. But its ultimate impact on low-income economies may pale in comparison to what’s coming via a potentially historic El Nino warming event.
Climate scientists are united in their prediction that the current El Nino, which started in June 2026 but will continue to affect weather patterns through 2027 and into 2028, could be the most severe in recorded history. Peak temperatures could exceed 3°C above average later this year, which will have cascading effects on virtually every country and industry.
The worst El Nino in modern history (1997 to 1998) caused billions of dollars of damages, killed off 16% of the world’s coral reefs, and devastated fisheries around the world. The effects were especially hard-felt in East Africa, where up to 80% of crops were destroyed.
This El Nino will, in all likelihood, be worse. Each part of the world will experience El Nino differently. Australia, southern Africa and parts of Asia are expected to see severe droughts. The southern United States, eastern Africa and parts of South America could see heavy rainfall and flooding. Storms in the Pacific Basin could be stronger than ever, leading to coastal flooding in heavily populated areas.
Farmers in many agricultural communities have come to expect severe and unpredictable weather patterns as the effects of climate change take hold. In 2025, 80% of the small businesses MCE works with reported that their farmer networks had been significantly affected by climate-related events over the past five years.
For 2027 and perhaps 2028, it’s a near-certainty that many harvests will underperform, increasing food prices around the world and pushing as many as 49 million people into food insecurity.
But just as we saw in the immediate aftermath of the Iran War, farmers are taking proactive steps to adapt to both market conditions and the natural environment – often with the help of impact investors like MCE Social Capital and its partners.
In Zambia, for example, farmers in the southern part of the country are clear-eyed in anticipating crop failures from severe drought. Farmers are doing what they can to prepare, including by testing more drought-resistant crops and drilling bore holes to improve irrigation.
Dave Lewis, the CEO and founder of conservation-focused agribusiness COMACO, said his team is preparing by diversifying its supply of crops and communicating to partners that certain staples (like legumes or maize) may see shortages. Some of the 359,000 smallholder farmers that COMACO works with will be hit harder than others where El Nino effects are most severe. Because of COMACO’s large geographic reach among its 100+ cooperatives, there will be areas where crop production will be more normal to make up for shortfalls in the more drought-affected areas.
Lewis credits this resilience to COMACO’s cooperative model and the organization’s commitment to innovative agroforestry techniques, like planting Ggliricidia sepium trees to help revitalize the soil and increase the recycling of nutrients from vegetation, which over time leads to both higher yields and more nutritious yields.
Similar stories are playing out in many of the agricultural communities where MCE Social Capital, or one of our partners, has a presence. In the Amazonas region of Peru, for instance, Cooperativa Laguna de los Condores (Coop. LDC) operates as a farmer-owned coffee cooperative that brings together more than 800 smallholder farmers. Coffee plants are under intense strain from rising temperatures, but by pooling their resources Coop. LDC members can strengthen their bargaining power and increase income stability for farmers.
Small and growing businesses like COMACO and Coop. LDC are a big part of how MCE approaches impact-first investing. Since 2016, we have directly supported more than 420,000 smallholder farmers, providing financing or credit to 16,000+ farmers, and helped create 4,200+ jobs.
A cornerstone of our strategy is the MCE Empowering Sustainable Agriculture (MESA) Fund, which launched in 2023 with backing from the U.S. International Development Finance Corporation and other investors. The MESA Fund was specifically designed to enhance the climate resilience of smallholder farmers by providing the flexible capital needed to diversify their crops and adopt regenerative agriculture practices (e.g., rotating crops regularly, planting more native species, etc.).
Across MCE’s portfolio of loans to agricultural businesses, we’ve witnessed how the transformative potential of catalytic capital can improve the livelihoods of countless farmers. However, we also recognize that the demand for capital far exceeds the supply, especially as more developing economies come to the realization that the best way to prepare for inevitable macroeconomic shocks is to invest in resilience.
Part of the reason for the capital shortage is because some DFIs have retreated from small-scale investments targeting farmers and entrepreneurs in favor of large-scale investments like infrastructure projects. But impact investors like MCE and its peers are rising to the occasion, leveraging our on-the-ground relationships and experience to get flexible capital in the hands of qualified borrowers.
We can’t predict or control for every potential shock to these farming communities, whether they be geopolitical conflicts or extreme weather. But we can help smallholder farmers build more resilience so that the next shock won’t be as disruptive.
Recommended reading