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Do Business Success Barriers Impede the Readiness of Philippine Small and Medium Enterprises in ‘Greening’ their Business?


Small and medium enterprises (SMEs) play an essential part in addressing the climate crisis due to their role in global economic value chains. However, SMEs face barriers that hinder them from fully transitioning to adopting sustainable business practices. The objective of this paper is to investigate if obstacles to SMEs' success affect their readiness to adopt sustainable business practices. We used data from the October 2023 AIM Rizalino S. Navarro Policy Center for Competitiveness SME Bricolage Survey where 500 SME owners and managers self-assessed their likelihood of adopting sustainable business practices with the presence of barriers. Using ordered logistics (ologit) regression, we found that access to finance had no statistically significant relationship with their self-assessed readiness to adopt sustainable business practices while technology and market access can affect a firm’s readiness to adopt sustainable business practices. We also found that despite the presence of business success barriers, firms seeing revenue growth are more ready to adopt sustainable business practices. We also observed in this paper that most of the surveyed firms (97.98 percent) want their businesses to contribute to address climate change. Ultimately, there is a crucial need to communicate the implementation of existing business-related and sustainability-related policies effectively.


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