How MSMEs Can Run Successful Businesses Sustainably The road to sustainability requires a shift in mindset. While financial considerations remain paramount, MSMEs must recognize that sustainable practices drive business growth, enhance brand reputation, and ensure regulatory compliance.
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As India advances toward its vision of Viksit Bharat 2047, micro, small, and medium enterprises (MSMEs) stand at a crucial juncture. These enterprises form the backbone of the Indian economy, contributing nearly 30 per cent to GDP and employing over 110 million people. Yet, as global sustainability imperatives grow, MSMEs face a unique challenge: balancing profitability with long-term environmental responsibility. The misconception that sustainability is an added cost rather than an opportunity for growth persists. However, industry leaders argue that integrating green practices into business strategies can enhance customer growth, reduce costs, and open new markets.
Girish Luthra, chairman of Luthra Group, underscores the importance of MSMEs embracing sustainability. "As India strides towards Viksit Bharat 2047, the role of MSMEs is pivotal—not just in driving economic growth but in shaping a sustainable future. MSMEs are the backbone of our economy; however, only 13 pe cent of them are aware of the benefits of implementing sustainability measures, as highlighted in the SPeX report by SIDBI and Dun & Bradstreet," he states. He points out that MSMEs often view sustainability as a cost burden rather than a business enabler, a perception that must change.
One of the most effective strategies MSMEs can adopt is resource efficiency. By optimizing energy and material usage, reducing waste, and switching to renewable energy sources such as biomass and RDF, businesses can significantly lower operating costs. "The reality is that sustainability and profitability are not at odds—they complement each other," Luthra adds. "Lower wastages, higher resource efficiency, and extended product life cycles directly contribute to cost savings and business longevity."
Dr. Naresh Tyagi, chief sustainability officer, Aditya Birla Fashion and Retail and chairman of the ICC National Expert Committee on Sustainability, echoes this sentiment. He emphasizes that sustainability is not just an environmental obligation but a business opportunity. He suggests MSMEs transition to renewable energy, adopt energy-efficient technologies, and implement circular economy practices such as upcycling waste into new products. "By incorporating these practices, MSMEs can lower costs, enhance operational efficiency, and align with global sustainability expectations," he explains.
Another significant area of focus is sustainable sourcing. MSMEs can partner with suppliers who follow responsible practices and use recycled materials. This not only reduces environmental impact but also enhances brand value, attracting eco-conscious consumers. Dr. Tyagi advises businesses to integrate sustainability into their core strategy instead of treating it as an afterthought. "A responsible business approach can build customer trust and open new market opportunities," he states. He further suggests that MSMEs leverage government incentives and partnerships to gain financial and technical support for sustainability initiatives.
Beyond individual efforts, industry collaboration is key. Luthra points to Japan's 'wild goose and duckling' model, where larger enterprises support smaller ones by sharing technology, best practices, and market access. "MSMEs must shift from operating in silos to forming strategic partnerships—with larger industry players, sustainability-driven enterprises, and government-led initiatives," he urges.
For businesses like Ice Make Refrigeration Ltd., investing in energy-efficient equipment has proven to be a game-changer. Chandrakant Patel, the company's managing director, stresses that reducing a business's carbon footprint begins with small but impactful steps. "Regular maintenance of machinery ensures optimal efficiency, while switching to green packaging and recycling scrap materials can significantly cut down waste," he notes. He adds that sustainable sourcing and collaborating with local communities can further strengthen an MSME's sustainability credentials.
Prashant Singh, co-founder & CEO of Blue Planet, advocates for a data-driven approach. "MSMEs should conduct carbon footprint assessments to identify major sources of emissions and set achievable reduction goals," he advises. He highlights that adopting digital tools to track resource consumption, optimizing logistics to reduce fuel usage, and transitioning to electric vehicles can significantly lower environmental impact. "By implementing these strategies, MSMEs can reduce their carbon footprint while maintaining operational efficiency and long-term profitability," he says.
The challenge of balancing sustainability with profitability is often seen as daunting, but experts agree that the two are not mutually exclusive. "Many green initiatives lead to long-term cost savings, such as energy efficiency reducing electricity bills and waste reduction lowering disposal costs," Singh explains. Businesses that integrate sustainability into their brand positioning also stand to gain a competitive edge, as consumer preference increasingly shifts towards eco-conscious products and services.
Moreover, government incentives provide a crucial boost. MSMEs can explore green financing options, tax benefits, and sustainability grants to mitigate initial investment costs. Adopting a phased approach—starting with small, high-impact changes and gradually scaling up—can ease the transition to sustainability. "It's about starting with what's feasible, optimizing existing operations, and then expanding into larger green initiatives," Singh notes.
The road to sustainability requires a shift in mindset. While financial considerations remain paramount, MSMEs must recognize that sustainable practices drive business growth, enhance brand reputation, and ensure regulatory compliance. Those who innovate and integrate sustainability into their core operations will be the ones who thrive in an increasingly eco-conscious world.
