Big bets on MSMEs for Climate Adaptation

ICRO, small and medium enterprises (MSMEs) are pivotal to supply chains and economic progress globally.

- ANANYA CHAKRABORTY, ARIVUDAI NAMBI APPADURAI, AND BHAWNA AHUJA ARE WITH WORLD RESOURCES INSTITUTE INDIA

ICRO, small and medium enterprises (MSMEs) are pivotal to supply chains and economic progress globally. Their potential to significantly reduce greenhouse gas (GHG) emissions has gained attention, with many large companies striving to cut emissions in their supply chains, where MSMEs contribute nearly 50%.

The critical need to engage MSMEs for building their climate adaptation is often overlooked. MSMEs are on the frontlines of climate change, facing severe fallout from hazards like cyclones, floods and heatwaves, which disrupt their operations and affect the value chain. In 2023, globally 70% SMEs experienced climate impacts, including disruptions to supply chain (39%), property and asset damage (25%) and productivity losses (24%). Since, MSMEs lack the expertise, tools and technology required to transition to sustainable practices and protect themselves, these damages are even bigger for them.