MUMBAI, India, Oct. 10, 2024 /PRNewswire/ — Dun & Bradstreet, a leading global provider of business data and analytics, along with SIDBI released the Sustainability Perception Index (SPeX) for April to June 2024. The highlight of this edition of SPeX is that the awareness of sustainability among MSMEs has increased over the past year, with MSMEs showing a stronger focus on environmental measures over social and governance factors in Q2 2024. They perceive sustainability initiatives as most beneficial for profitability and brand image compared to other factors.
The Sustainability Perception Index (SPeX) assesses MSMEs’ perceptions of sustainability across three key areas, i.e., willingness, awareness, and implementation. The SPeX score ranges from 0 to 100, with higher values indicating a stronger commitment to sustainability. The overall SPeX score captures changes within these dimensions, offering insights into how MSMEs understand, are willing to engage, and implement sustainability measures. An increase in the index reflects a positive change in perceptions and practices, while a decrease may signal challenges or reduced willingness to implement sustainable practices.
In this quarter, the SPeX value remained steady at 54. The awareness dimension led with a score of 59, a 9% increase, while implementation rose 35% to 49. However, overall awareness dropped 17% to 51. Implementation improved compared to the previous quarter, with micro businesses at the forefront of adopting sustainability practices. The percentage of micro firms reporting implementation saw highest increases in four key areas like training on sustainability measures, compliance, sourcing from ethical suppliers, and recycling practices.
Dr. 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. The government’s initiative to create Climate Finance Taxonomy as announced in the Union Budget in July 2024 will be key in directing capital toward climate-resilient infrastructure, aiding MSMEs in achieving energy efficiency and emission reduction targets”.
Dr. R.K Singh, CGM, SIDBI stated, “SPeX endeavours to be a tracker of MSMEs’ intent and preparedness to go for green investments. This also helps us to customise our solutions aimed at inducing MSMEs to align to value chain expectations on responsiveness. SIDBI – D&B Sustainability Perception Index Survey, April – June 2024 indicates slight stability in the SPeX score, indicating 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. SIDBI has prioritized the Greening of Enterprise Ecosystem. SIDBI’s Panchtatva missions viz. Energy Efficiency, E-Mobility, Renewable Energy, Circular Economy and Adaptation Finance (Nature based Solutions) are oriented to enhance the acceptability amongst MSMEs to ‘Go Green‘ and adopting Environmental & Social (E&S) practices for holistic improvement in the enterprise thereby making more resilient, competitive, sustainable operations / practices / products / services.”
Highlights of the SPeX Report:
- Awareness of sustainability among MSMEs has increased over the past year, with medium, small, and micro firms showing a stronger focus on environmental measures over social and governance factors in Q2 2024. They perceive sustainability initiatives as most beneficial for profitability and brand image compared to other factors.
- Larger section of medium and small firms believes sustainability efforts can improve brand image (89%), boost stakeholder appeal (88%) and profitability (84%), though they are less confident about cost reduction with 78% of them stating it.
- Implementation in Q2 2024 has improved over the past quarter, with micro businesses leading in implementing sustainability practices in Q2 2024.
- The percentage share of micro firms reporting implementation in Q2 2024 compared to Q1 2024 saw the highest increase in four categories: training on sustainability measures, compliance, sourcing from ethical suppliers, and recycling practices.
- Sustainability initiatives by firms vary by age. In case of internal sustainability initiatives, younger (less than 1 year) and older MSMEs (more than 25 years) engage more on environment related measures. While MSMEs aged between 1-25 years revealed focusing on labour welfare.
- For external sustainability initiatives, old (more than 25 years) and younger MSMEs (less than 5 years) are mostly involved in community welfare. While MSMEs aged between 5-25 years are engaged with activities related to development of the environment of local community.
- Despite the increased awareness, MSMEs face challenges in quantifying the benefits of sustainability investments, with many concerned about returns from sustainability initiatives and having limited familiarity with social aspects of sustainability.
- Global client demand is a primary driver for medium and small firms to adopt sustainability practices, while high costs, availability of capital, and lack of technical expertise are major challenges across all firm sizes.
The report can be downloaded for free from the website of Dun & Bradstreet India (http://www.dnb.co.in/).
About Dun & Bradstreet:
Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet’s Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk and transform their businesses. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. For more information on Dun & Bradstreet, please visit http://www.dnb.com.
Dun & Bradstreet Information Services India Private Limited is headquartered in Mumbai and provides clients with data-driven products and technology-driven platforms to help them take faster and more accurate decisions in domains of finance, risk, compliance, information technology and marketing. Working towards Government of India’s vision of creating an Atmanirbhar Bharat (Self-Reliant India) by supporting the Make in India initiative, Dun & Bradstreet India has a special focus on helping entrepreneurs enhance their visibility, increase their credibility, expand access to global markets, and identify potential customers & suppliers, while managing risk and opportunity.
India is also the home to Dun & Bradstreet Technology & Corporate Services LLP, which is the Global Capabilities Center (GCC) of Dun & Bradstreet supporting global technology delivery using cutting-edge technology. Located at Hyderabad, the GCC has a highly skilled workforce of over 500 employees, and focuses on enhanced productivity, economies of scale, consistent delivery processes and lower operating expenses.
Visit http://www.dnb.co.in for more information.
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About SIDBI:
Small Industries Development Bank of India (SIDBI) in its role as the Principal Development Finance Institution for MSME sector has played a significant role in developing the financial services for MSME sector through various interventions including Refinance to Banks, Credit Guarantee programs, Development of the MFI sector, Contribution to Venture capital/AIF funds, MSME ratings, promoting digital lending ecosystem, etc. The Bank has proactively been working toward Energy Efficiency (EE) in MSMEs since 2005-06 as part of Direct Finance business using support of multilaterals like World Bank, ADB, GiZ, FCDO, JICA, AFD, KfW etc. for energy efficient projects. SIDBI has taken steps to promote Energy Efficiency and Cleaner production in the MSME sector and propose to accelerate its efforts for MSME sector for their survival, growth and competitiveness in long run during prevailing climate related challenges.
Looking to importance of ESG aspects and the need for a simplified, Customised ESG risk rating framework, SIDBI has already started integration of ESG framework into its operations. Subsequent to setting up of Green Climate Finance Vertical for prioritised focus, a Board level Committee has been constituted for guidance, oversight and monitoring on ESG, Green Strategy of the bank, including relevant SDGs etc. To lead with the example, SIDBI has set a target to become Carbon Neutral by 2024 and Net Neutral organization in subsequent years.
Through Green Financing products and other developmental activities, SIDBI enables the manufacturers and service providers in MSME sector to adopt green energy efficient technologies helping in lesser waste leading to positive impact on environment and sustainability.
Visit http://www.sidbi.in for more information.
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