A higher percentage of businesses in the SPeX leadership category, according to the SIDBI - D&B Sustainability Perception Index, have started these sustainability initiatives in response to customer demand
In 65% of MSMEs, there are no clear sustainability goals. According to the SIDBI - D&B Sustainability Perception Index (SPeX - the green pulse indicator). It further highlights that 64% of companies do not have sustainability-related compliance measures in place, and 68% do not have sustainability-related policies and procedures in place.
The perception of sustainability among Indian MSMEs is measured and tracked by SPeX. The Index evaluates the internal and external elements on three dimensions—willingness, awareness, and implementation—that affect how consumers perceive organisations' commitment to sustainability.
Arun Singh, Global Chief Economist, Dun & Bradstreet said, “Notably, it has been the increase in the awareness level which has driven the change in the Index as the level of implementation remained stagnant and willingness amongst SMEs saw a minor increase compared to last quarter. Insights from the survey indicate that one of the reasons which prevents the implementation of sustainability measures is that the majority of the SMEs, i.e., more than 60%, do not have any defined sustainability targets and have not established any sustainability policies and procedures.”
R K Singh, CGM, SIDBI stated, “SPeX aims to be a reliable indicator of the state of environmental, social, and governance (ESG) adoption among MSME companies based in India. This presents a quantitative measure of sustainability practices perception of the MSME sector against which policymakers can gauge the industry insights and level of adoption of sustainability initiatives in the sector. Such a measure is expected to act as an incentive to the sector to further adopt the ESG framework and sustainability practices deep into their operations. With SPeX, an Index indicator for MSMEs on sustainability, we are moving in the right direction to mainstream the MSME sector in the green transition pathway. This survey and index will help MSMEs to harness the opportunity provided in the global sustainability transition and address any transitional challenges.”
According to the index, MSMEs view sustainability initiatives to be a useful guide for responsible governance across all SPeX leadership categories, and a higher share of businesses in the SPeX leadership category have activated these sustainability initiatives due to customer demand.
The adoption of sustainability practices, according to 50% of MSMEs, has improved brand image, reduced costs, and increased attractiveness to diverse stakeholders.
41% of MSMEs state that they are completely aware of the effect it has on profitability.
A bigger percentage of enterprises in the SPeX leadership category have activated these sustainability activities as a result of customer demand, the survey claims. MSMEs perceive sustainability initiatives as a good guide for responsible governance across all SPeX leadership categories.
The majority of MSMEs do not currently have any plans or efforts in place for any of the seven sustainability activities that were examined. 90% of MSMEs consider cost cutting to be the most important reason that drives them to adopt sustainability efforts. Regulations are ranked second (80%), and 69% of respondents think that the desire to support sustainability is the most crucial element. The two elements that have the least impact on MSMEs' adoption of sustainability measures are peer pressure (28%) and external forces (5%).