Support from government schemes and corporate social responsibility (CSR) allocations can be tapped to finance micro, small and medium enterprises (MSMEs) in adopting measures to reduce carbon emissions and improve climate resilience, experts have said. 

They pointed out that MSMEs, which form the backbone of India’s industrial output and jobs, face mounting risks from extreme heat, floods and other climate shocks but often lack access to climate finance instruments available to larger companies. 

“Government and private sector seed funding is needed so that industrial clusters can empower local leaders to anticipate risks, prepare plans and act proactively before climate shocks hit,” said Giriraj Amarnath, Research Group Leader, Water Data for Climate Resilience at the International Water Management Institute. He added that CSR funds could also be channelled into data-driven early warning systems and IoT-based forecasting models, enabling MSMEs to adopt a “no-regret” approach. 

Industry representatives highlighted the challenges on the ground. Raghav Dalmia of Prayagraj Dyeing and Printing Mills noted that Surat’s textile MSMEs face acute heat stress, with machines operating at 130–180 degrees Celsius and poor ventilation worsening working conditions. 

Experts further recommended climate-informed planning for new MSME clusters or SEZs. “The government can mandate building bylaws such as raised plinth levels and soft stories for flood safety,” said Umamaheshwaran Rajasekar. He stressed that retrofitting is far more difficult once clusters are operational and advised locating critical equipment like batteries and electrical panels in elevated zones. 

On workplace safety, Vidhya Venugopal, Professor of Industrial Hygiene and Country Director at the National Institute of Health and Care Research, suggested MSMEs provide cooling breaks of 5–10 minutes every hour during heatwaves and combine active and passive cooling technologies to safeguard worker health and productivity. 

Aditya Raghwa, Head of Governments & Policy South Asia at Climate Group, said that cluster-level vulnerability assessments, heat action plans and flood drills developed by large corporations must be communicated effectively to MSMEs. 

However, financing remains a key barrier. “Most climate finance instruments in India, such as green bonds, ESG-linked loans and blended finance, are designed for large corporates. MSMEs struggle to access even basic working capital,” said Nambi Appadurai, Director, Climate Resilience Practice at WRI India. He added that MSMEs’ lack of standardized disclosures makes them “invisible” in policy and financial frameworks. 

Experts concluded that unless MSMEs’ climate vulnerabilities are integrated into supply chain resilience strategies, they risk being excluded from climate finance. Raising awareness and improving access to technical and financial resources were highlighted as urgent next steps.