Strategies and implications for climate change resilience in small enterprises

Small and medium-sized enterprises (SMEs) play a key role in global economies, yet they are disproportionately vulnerable to climate change due to limited resources, information gaps, and restricted access to finance. This review provides an integrated synthesis of the literature on climate-related impacts on SMEs, the adaptation strategies they adopt, the barriers that constrain those responses, and the policy actions required to strengthen resilience. Drawing on 89 peer-reviewed studies and policy documents published between 2000 and 2025, we organise the evidence through a resilience-centred framework that links exposure, adaptive capacity, institutional conditions, and behavioural frictions. Our synthesis categorizes impacts into five dimensions, physical, operational and economic, regulatory and market, social, and international supply chain, and shows that SME vulnerability commonly arises from direct climate exposure, rising input and compliance costs, disrupted supply chains, and limited access to finance, insurance, information, and technical capability. We identify a range of adaptation strategies, including technological innovation, supply chain diversification, financial preparedness, stakeholder engagement, and the adoption of environmental standards. However, these are frequently constrained by financial, informational, and behavioural barriers, including cognitive biases that lead managers to underestimate long-term risks. The evidence base remains weighted toward qualitative and case-based studies, with relatively limited longitudinal and causal evidence on adaptation effectiveness. The review further demonstrates that emerging international regulations, such as the EU Carbon Border Adjustment Mechanism and Corporate Sustainability Due Diligence Directive, are creating new compliance challenges for export-oriented SMEs. Based on these findings, we provide policy recommendations differentiated by time horizon and governance level and outline priority areas for future research, including the evaluation of long-term returns on adaptation investments, the role of digital technologies in enhancing resilience, and the scalability of blended finance models for SMEs in climate-vulnerable regions.