A total of 78 per cent of Indian micro, small and medium enterprises (MSMEs) consider sustainability initiatives to be closely linked to business strategies, as per a report by Dun and Bradstreet India and Small Industries Development Bank of India (SIDBI).
The Sustainability Perception Index (SpeX) for October to December 2022 stood at 46, indicating a low level of perception towards sustainability by MSMEs of India.
"Nearly 44 per cent consider sustainability measures to be a useful guideline towards responsible governance, while another 19 per cent consider it to be a requirement for working with global businesses," it added.
It also highlighted that awareness of sustainability measures is low amongst MSMEs as only 69 per cent are partially aware of the opportunities for implementing sustainability measures and relevant sustainability factors for their business, sector and geography.
Interestingly, MSMEs believe that sustainability initiatives would have a positive impact on the bottom line (23 per cent), impact on employee retention (21 per cent) and positive outcomes on social lives and communities (20 per cent).
Avinash Gupta, Managing Director and CEO– India, Dun & Bradstreet said, “MSMEs believe that raising awareness is necessary to increase adoption of sustainability measures and that these would benefit the bottom line (23 per cent), staff retention (21 per cent), and social lives and communities (20 per cent)."
Gupta added that the greatest enabler of sustainability adoption is cost reduction, followed by internal management drive and government policies and regulations. The most difficult issues are technical expertise and established operational processes.”
Sivasubramanian Ramann, Chairman and Managing Director, SIDBI stated, “Understanding and awareness about ESG are gaining momentum amongst MSMEs and it is relevant in view of changing scenarios related to climate aspects."
Notably, 50 per cent of MSMEs chose ‘ethics and integrity’ as a sustainable priority, while only 20 per cent chose ‘diversity and inclusion’ as their sustainable priority.
Meanwhile, MSMEs prioritise economic objectives, followed by social and environmental goals while implementing sustainability measures, it added.