Analysis of Environmental, Social, and Governance (ESG) Readiness and Implementation in MSMEs: The Role of Business Profiles and Organizational Characteristics
DOI:
https://doi.org/10.61132/ijema.v3i2.1239Keywords:
Business Profile, ESG, MSMES, Organizational Characteristics, SustainabilityAbstract
In today's era of sustainable economics, the application of environmental, social, and governance concepts is gaining traction and spreading to the MSMEs sector. However, in reality, putting these ideas into effect frequently encounters difficulties like scarce resources and low awareness among small and medium-sized businesses. To address these challenges, it is critical to provide personalized support and training that enables MSMEs to effectively integrate sustainable practices into their operations. ESG in the MSMEs sector still shows a considerable gap. Therefore, this study was conducted to examine the influence of business profiles and MSMEs characteristics on ESG implementation. Data was collected using a questionnaire distributed to 100 MSMEs operators. There are three main dimensions in this study: business profile, organizational characteristics, and ESG implementation. Hypothesis testing was performed using multiple linear regression analysis with the assistance of SPSS software. The results of the hypothesis testing indicate that business profile and organizational characteristics have a significant positive effect on ESG implementation. These results suggest that internal factors, namely business profile and organizational characteristics, are key factors capable of driving the sustainable adoption of ESG in the MSMEs sector.
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