Almost 90 per cent of MSMEs see cost reduction as the biggest motivation for sustainability initiatives.
The SIDBI – D&B Sustainability Perception Index (SPeX – the green pulse indicator) for January – March 2023 stands at 54, eight points higher than the October – December 2022 level of 46, suggesting a higher level of perception towards sustainability by Indian MSMEs. SPeX measures and tracks Indian MSMEs’ perception towards sustainability.
The SPeX report says that 65 per cent of MSMEs do not have any defined sustainability targets. 68 per cent have not established policy and procedures for sustainability, while 64 per cent do not have sustainability related compliance measures in place.
It also adds that 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.
It further adds that 41 per cent of MSMEs claim to be fully aware of its impact on profitability.
The Index assesses the internal and external factors that shape sustainability perception of businesses on three dimensions, namely – Willingness, Awareness, and Implementation.
Three out of four SMEs also stated that they lack the internal expertise to create a sustainable business strategy. Awareness about availability of low-cost funding (green financing) is still low amongst MSMEs – 67 per cent have limited or no awareness of low-cost green finance options.
It can be mentioned here that more than 70 per cent of the Indian textile and apparel industry is MSME and also working towards becoming sustainable.
