The awareness around sustainability measures in business among MSMEs has increased over the past year as enterprises have shown a stronger focus on environmental measures over social and governance factors in Q2 2024, the latest Sustainability Perception Index (SPeX) for MSMEs by Dun & Bradstreet and SIDBI for the June quarter said on Friday.
The index evaluates sustainability perception among MSMEs across three key areas including their willingness, awareness, and implementation of sustainability measures in business. The SPeX score ranges from 0 to 100, with higher values indicating a stronger commitment to sustainability.
A higher index shows a positive change in perceptions and practices.
During the June quarter, the SPeX stood at 54 out of 100 with awareness dimension scoring 59, a 9 per cent increase, while implementation jumped 35 per cent to 49. However, overall awareness dropped 17 per cent to 51. SPeX during June quarter last year stood at 46.
Implementation improved compared to the previous quarter, with micro businesses at the forefront of adopting sustainability practices, the index said.
The percentage of micro firms reporting implementation saw the highest increases in four key areas like training on sustainability measures, compliance, sourcing from ethical suppliers, and recycling practices.
Speaking on the latest quarterly report, Arun Singh, Global Chief Economist, Dun & Bradstreet, said over the past year, MSMEs have become more aware of sustainability, particularly of environmental measures, and are increasingly recognizing the profitability and cost-saving benefits of sustainable practices.
“However, high costs, availability of capital, and difficulty in quantifying benefits make them hesitant to deepen their expertise. To overcome these barriers, it’s crucial to reduce the cost of adopting sustainable practices and increase funding, especially for cleaner production and recycling technologies,” he said.
According to the index, 89 per cent of medium and small enterprises believed that sustainability efforts can improve brand image while 88 per cent said such efforts can boost stakeholder appeal. Moreover, 84 per cent said the efforts can enhance profitability though they are less confident about cost reduction with 78 per cent of them stating it.
The June survey indicates “the need to effectively scale up and augment the capacity building, orientation and awareness on enterprise side. The level of implementation needs a fillip across all sizes of enterprises,” said R.K Singh, CGM, SIDBI.