MSME Emission Cuts: Govt Aid & Corporate Funds

New Delhi, Sep 21 (PTI) Support from the government and funds under the corporate social responsibility (CSR) can help finance MSMEs' measures to curb carbon emission, according to experts.

Transition to clean energy, climate-informed building bylaws and combining active and passive cooling technologies to improve workers' productivity are some of the other steps that can protect MSMEs from climate-related risks, they said.

"The government and the private sector need to provide seed funds 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, International Water Management Institute.

CSR funds, too, can be leveraged for building resilience measures, he said, adding, "data-driven early warning and IoT-based forecasting models can help MSMEs adopt a no-regret approach".

Citing an example of the impact of extreme weather on MSMEs, Raghav Dalmia from Prayagraj Dyeing and Printing Mills pointed out that Surat's textile MSMEs face acute heat stress challenges, with machines operating at 130-180 degrees and poor ventilation compounding the problem.

Umamaheshwaran Rajasekar recommended establishing new infrastructure that can account for emerging climate risks during the design phase.

"Besides, for new MSME clusters or SEZs, the government can mandate climate-informed building bylaws (e.g., raised plinth levels, soft stories for flood safety).

"Retrofitting is far harder once clusters are already operational, especially against floods... MSMEs need guidance on locating critical equipment (e.g., batteries, electrical panels) in safer, elevated zones to reduce flood risk," he said.

Vidhya Venugopal, Professor Industrial hygiene, and Country Director, National Institute of Health and Care Research Environmental Change-Non Communicable Diseases, said during heatwaves, MSMEs can compulsorily provide 5-10 minutes of cooling breaks every hour and combine active and passive cooling technologies to effectively improve workers' productivity and mitigate the impacts of heat stress.

"Cluster-level vulnerability assessments can support MSMEs to integrate resilient infrastructural planning. Knowledge about climate resilience measures like Heat Action Plans or flood drills developed by big brands and corporations need to be effectively communicated to MSMEs," said Aditya Raghwa, Head, Governments & Policy South Asia, Climate Group.

Most climate change-related finance instruments in India such as green bonds, ESG-linked loans, blended finance are designed for large corporates, while MSMEs struggle to access even basic working capital, Nambi Appadurai, Director, Climate Resilience Practice, WRI India, said.

"Further, MSMEs lack standardised disclosures or evidence on climate-induced disruptions, making them invisible in policy and financial frameworks. Unless their climate vulnerabilities are reframed in terms of supply chain risks and sector-level resilience, they will remain excluded from climate finance architecture.

"Substantial work needs to be done to raise awareness of the available opportunities and how to access those resources, both technical and financial," Appadurai added.