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MSMEs revealed that 62 % are aware of ESG , largely driven by environmental concerns ( 72 %). However , this awareness drops when it comes to social ( 44 %) and governance aspects ( 31 %). So , what ’ s holding them back ? The biggest barriers to adopting ESG are high implementation costs , lack of expertise , and limited access to finance .

Despite these challenges , MSMEs that embrace sustainability are reaping tangible benefits . From stronger customer loyalty and operational efficiency to enhanced brand value and better access to capital , ESG transforms from a cost burden into a competitive advantage . Integrating sustainability boosts top-line growth while optimizing operational costs , making it a powerful tool for businesses to thrive .

Why MSMEs Should Care About Sustainability

The United Nations has consistently emphasized the critical role of MSMEs in achieving the Sustainable Development Goals ( SDGs ). Here ’ s how MSMEs directly align with the global sustainability agenda :

• Employment and Economic Growth ( SDG 8 ): MSMEs are the backbone of employment in SSA , providing jobs for vulnerable groups like women and youth . In Nigeria alone , MSMEs employ over 57 million people , while in Kenya , they account for 6.2 million jobs .

• Poverty Alleviation ( SDG 1 ): MSMEs are vital for reducing poverty , particularly in rural areas , by providing income opportunities and supporting livelihoods .

• Sustainable Innovation ( SDG 9 ): MSMEs are often at the forefront of innovation , especially in sectors like agriculture and eco-friendly technologies .

• Responsible Consumption ( SDG 12 ): Many MSMEs are embracing circular economy principles , reducing waste , and adopting eco-friendly production methods .

• Partnerships for the Goals ( SDG 17 ): Through collaborations with governments , international organizations , and larger corporations , MSMEs can scale their impact and contribute to global sustainability efforts .

Globally , MSMEs account for 60-70 % of employment and around 50 % of GDP , but in SSA , this contribution is even more pronounced . Across the region , MSMEs drive economies , but their informality limits their ability to integrate ESG practices that could unlock even greater potential .

How Policies Are Supporting MSME Sustainability

Governments across Sub-Saharan Africa are stepping up with initiatives to encourage MSMEs to adopt greener practices . In Ghana , tax incentives and green financing are available to MSMEs integrating sustainability , particularly in agribusiness and renewable energy sectors . Rwanda ’ s Green Growth and Climate Resilience Strategy offers technical support and funding for MSMEs in sustainable agriculture . Kenya ’ s partnership with the Kenya Climate Innovation Center provides mentorship and financing to help businesses go green .

South Africa ’ s Department of Small Business Development is also offering grants to small enterprises focused on energy efficiency and waste reduction , making sustainability a key factor in competitiveness . These initiatives show a growing recognition of the critical role MSMEs play in addressing climate challenges .

MSMEs Must Rise , or Risk Falling

If MSMEs in SSA continue to ignore sustainability , they risk falling behind in an increasingly eco-conscious global market . Consider Ghana , where MSMEs make up 80.7 enterprises per 1,000 people . The government is actively incentivizing green practices , opening international markets to MSMEs . Ethiopia , with its 176,543 MSMEs , is focusing on sustainable agriculture and green investments as key drivers of future growth .

Climate change disproportionately impacts SSA , making it crucial for MSMEs to integrate ESG into their operations . Without it , they face potential supply chain disruptions , resource shortages , and missed opportunities in global markets . It ’ s no longer a question of whether MSMEs can afford sustainability , but whether they can afford not to embrace it .

Embracing ESG is the Future

Micro , small , and medium-sized enterprises ( MSMEs ) often view sustainability as something only relevant to large corporations , believing that the administrative and financial burden outweighs the potential gains . This perception is especially common in Sub- Saharan Africa , where getting MSMEs to embrace sustainability can be a tough sell . However , MSMEs that integrate sustainability into their core strategies stand to benefit significantly lowering costs , reducing risks , and unlocking new opportunities .

Sustainability-conscious consumers are on the rise , and MSMEs that prioritize eco-friendly practices can tap into new markets and enhance their competitiveness . Businesses that incorporate sustainability demonstrate higher social responsibility , building stronger relationships with consumers and stakeholders alike . While the initial costs of sustainability may seem high , the long-term rewards - such as increased sales , stronger customer loyalty , improved operational efficiency , enhanced brand reputation , and better access to capital - make ESG a strategic advantage . According to an Ipsos survey , MSMEs that embrace ESG consistently experience these powerful benefits , transforming sustainability from a cost to an opportunity .

If Bane taught us anything , it ’ s that chaos isn ’ t sustainable . MSMEs in SSA cannot afford to remain informal forever . Much like Batman , sustainability may seem like a distant savior , but it represents the future of business . The UN sees MSMEs as vital to achieving the SDGs , and by embracing ESG , these businesses can drive innovation , scale social impact , and lead the charge toward environmental stewardship .

It ’ s time for MSMEs to rise - because in today ’ s world , survival is no longer enough . It ’ s time to thrive . After all , if there ’ s one thing Bane taught us , it ’ s that those who ’ ve lived through chaos are often the best at surviving it .

Soyinka Witness spearheads the ESG practice for Ipsos Kenya and leads the Ipsos Strategy3 team across Sub-Saharan Africa , guiding and mentoring colleagues towards impactful work . You can commune via email at : Soyinka . Witness @ ipsos . com .