Building a Sustainable Business in China's Small and Medium-sized Enterprises (SMEs)

Abstract

Given the SMEs a heterogeneous group in the Chinese society due to their inherent characteristics, this paper takes a preliminary step to look into the complicated and dynamic environment for engaging China's SMEs in corporate sustainability. It aims to provide insight into how China's SMEs perceive and practice sustainability, and to explore key drivers and barriers behind their environmental and social engagement. Findings reveal an apparent contradiction in the current status of China's SMEs towards sustainability: a high level of concern vs. a low level of engagement. The most important motivator appears to be improving corporate image, followed by governmental legislation. While barriers hindering SMEs' sustainable engagement vary, predominant problems involve a lack of awareness and perception, insufficient financial resources and insufficient or ill-suited external support. Accordingly, the paper highlights three areas for China's SMEs' further improvements: education, communication and cooperation.