Promoting private sector engagement in climate change adaptation and flood resilience: A case study of innovative approaches applied by MSMEs in Mumbai, India

Recurring heavy precipitation and flooding cause extensive loss and damage in cities like Mumbai. Among the worst affected are Micro Small and Medium Enterprises (MSMEs) which suffer damage to physical structure and loss of business. These costs amount to millions of dollars and are borne by MSMEs in the absence of adequate insurance protection.

With limited flood management services and inadequate infrastructure provided by the municipal authorities, MSMEs are implementing their own temporary measures for flood protection. These are often ineffective during heavy precipitation and create risks of maladaptation. As climate change is expected to worsen the risk of flash floods with changes in intensity, frequency and duration of rainfall, MSMEs need long-term solutions to build their adaptive capacity and resilience.

This paper describes the business case for private sector engagement in flood risk reduction and climate adaptation from the perspective of MSMEs in Mumbai. Based on extensive field surveys of MSMEs located in industrial estates, the paper discusses the implications of floods for MSMEs. Moreover, the authors present a framework developed for MSMEs to make informed risk reduction and adaptation decisions and implement effective structural and non-structural measures to minimize the recurring adverse impacts of floods on their business operations.