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Sustainability Implementation Challenges Persist Among MSMEs: SIDBI-D&B SPeX Survey Insights

The latest quarterly survey conducted by Dun & Bradstreet India and SIDBI sheds light on the ongoing challenges faced by Micro, Small, and Medium Enterprises (MSMEs) in implementing sustainability measures. A mere 25% of surveyed MSMEs claim to possess the internal expertise necessary for integrating sustainability into their business practices. Technical expertise and capital availability continue to be the primary hurdles, according to responses across three consecutive surveys.

Lack of Awareness on Green Financing and Brand Impact

The survey reveals that only one in three MSMEs are familiar with green financing and the potential impact of sustainability on enhancing brand image and competitiveness. This knowledge gap emphasizes the need for bridging the apparent disparity between available support from agencies and the government and the actual adoption of sustainability practices by MSMEs.

Compliance Lags Behind, Impact on Client Retention Varies

Although there is a high level of awareness and willingness to implement sustainability measures, compliance remains low on the list of priorities for MSMEs. Only 17% have initiated sustainability-related policies, and merely 23% claim prompt and full compliance with sustainability regulations. Additionally, only 40% of MSMEs acknowledge a positive contribution of sustainability initiatives to client retention.

Capacity Building Crucial for Sustained Implementation

The survey suggests a continued need for capacity building efforts, especially at the enterprise level. While awareness and willingness are prevalent, the level of actual implementation requires significant enhancement across all sizes of enterprises. SIDBI, recognizing this gap, currently operates various programs supporting MSMEs in areas such as energy efficiency, sustainable commuting, solar adoption, waste management, and environmentally friendly technologies through its Panchtatva mission for small businesses.

Index Improvement Indicates Progress

Despite the challenges, there is a positive sign, as the Sustainability Perception Index (SPeX) for the July-September quarter of 2023 improved to 48 from 46 in the June quarter. This increase signifies an enhanced perception of sustainability among MSMEs, indicating a gradual improvement in implementation efforts.


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