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Impacts of Climate Change to SMEs

Climate change like natural disasters, drought and other extreme natural phenomena may impact MSMEs in several ways.

1. Disrupts Business Operations

• Due to utility disruptions like energy, fuel or water during or logistic challenges for raw material/ supply chain during natural disasters or extreme weather/ natural phenomena.

2. Increased Cost of Production

• Due to reduced resources and cost of infrastructure rehabilitation

3. Reduced Commercial Activity

• Due to loss of business and tourism revenue should they experience natural disasters

Benefits of engaging in Climate Action

1. Positive Environmental Impacts

• When implementing the right mitigation, energy and resources efficiency measures, MSMEs can reduce their environmental footprint and GHG emissions therefore contributing to the global climate mitigation targets.

2. Increased resilience

• Adopting the appropriate adaptation measures will help MSMEs lower their vulnerability to climate change risks, avoid job losses and declining economic growth.

3. Improving processes, profitability & competitiveness

• setting greenhouse gas targets can help MSMEs save money, generally through the implementation of energy and resources efficiency which in turn can lead to reduced production costs and enhanced product sales, making them more competitive.

4. Company’s prestige, social responsibility, customer trust

• MSMEs can become more competitive and attractive to potential investors and customers.

4. Company’s prestige, social responsibility, customer trust

• MSMEs can become more competitive and attractive to potential investors and customers.

5. Financial opportunities

• There is also a global growing market for climate action products and services that MSMEs could also profit from

6. Cost Savings

• Actively improving resource efficiency, such as reducing water, paper or energy use can lead to cost savings, essential to address future changes that could endanger the entire business model.

Source: UNFCC – SME Report Asia

Next steps

Our Approach To Sustainability

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