Comparison of Sustainability Factors Influencing Environmental, Economic and Social Sustainability- An Empirical Study in an Emerging Economy

Sustainability symbolizes an equitable world with responsible governments, businesses and people striving to protect the natural environment and social equity, at the same time not compromising in their quest for economic growth (Adams & Zutshi 2004). Though SMEs form the backbone of an economy, research on sustainability has focused only on large firms. This study, carried out among SMEs provides a fresh perspective on sustainability. The objective of the study is to examine the factors driving the three pillars of economic, environmental and social sustainability in the context of SMEs in India. Murphy (2012) defined environmental sustainability as “the practice of responding to environmental issues in a socially responsible manner”. According to Beheiry et al. (2006), the economic pillar of sustainability is “the implementation of business practices with the assurance of future economic growth”. Social sustainability signifies the responsibility of a business towards the social well-being of the stakeholders. The sustainability factors considered for this study was perceived benefits, firm competency and market forces. It is highly essential to understand the factors which strongly drive sustainability practices so that firms would be able to identify potential strategies that could be adopted to achieve their sustainability agenda. This study was undertaken among 220 SMEs operating in an industrial city in South India. An instrument was developed based on extensive review of literature and tested for reliability and validity. Appropriate statistical tools were applied and the data was analysed. The study found the strong driving forces with regard to the factors -perceived benefits, firm competency and market forces. The results of this study also provide the basic framework for policy makers to identify the ways and means through which the sustainability quotient of the SMEs could be enhanced.