A STUDY OF THE POTENTIALS AND CHALLENGES OF SUSTAINABILITY PRACTICE AT THE SMES IN INDONESIA

• Main Author: Febrina Yolanda, Sarah
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/71724
• Institution: Institut Teknologi Bandung

Pressure from consumers, government and policymakers has primarily driven a growing trend of businesses implementing sustainability practices. Most recently, these issues have begun to engage with the grand challenges stipulated in the UN’s Sustainable Development Goals. However, most studies focus on the situation of large companies in different sustainability application areas and Small and Medium Enterprises (SMEs) are lagging behind. In this study, we thus seek to develop an understanding of (i) the understanding of sustainability and the UN Sustainable Development Goals within SMEs (ii) the different types of sustainability practices that SMEs adopt (iii) the opportunities and challenges associated with these different types of sustainability practices. We do this research through a qualitative multiple case study based on interviews with CEOs and sustainability managers in a heterogeneous sample of 10 SMEs in Indonesia. SMEs in Indonesia can be a suitable sample for studying sustainability practices, as they play a significant role in the economy and are likely to have unique potentials and challenges related to sustainability. First, we outline the understanding of sustainability and the UN SDGs within SMEs. Second, we introduce four categories of sustainability practices namely inspire, integrate, collaborate, and impact, and also provide a framework for understanding the different types of sustainability practices that were identified in the study. Finally, presenting both the potentials and challenges towards more mature sustainability practices of SMEs. First, our findings indicate that not all SMEs have fully integrated sustainability into their value proposition and communication strategies. This means that there is a significant opportunity for SMEs to differentiate themselves from competitors by promoting their sustainability efforts and making it a key part of their brand identity. Second, the maturity of Indonesian society, or the level of awareness and understanding of sustainability issues, is an important factor to consider from an external market perspective.