Towards Green Credentials of SMEs: Qualitative Insights on Barriers to Green Responsiveness from a Developing Economy

Abstract

This study explored the drivers/stimulators behind the effective implementation of green strategy and how firms can strategically minimise barriers and hurdles. It investigated the barriers to green responsiveness encountered by small and medium-sized enterprises (SMEs) from the perspective of owners/top managers in a developing economy. The present study utilised qualitative data gathered from 16 semi-structured interviews with manufacturing and service sector SMEs in Sri Lanka. It adopted directed qualitative content analysis to determine how firms interpret and judge the barriers to green engagement, which are classified into responsibility, practicality and individual barriers. The study found that responsibility and practicality-related barriers are the most salient barriers experienced by SMEs. The gaps in environmental regulatory frameworks, acts and ordinances, weak coordination and monitoring systems, and excessive political interventions caused resentment towards the prevailing command-control policies, as well as the lack of government support and incentives to navigate the embryonic stage of utilising market-based approaches in green responsiveness. The study outcome offers policymakers valuable implications regarding environmental policy development and suggests SME owners/managers focus on the existing barriers and formulate strategies to overcome them to ensure corporate sustainability.