Integrating ESG Factors and Circular Economy Practices in Family-Owned SMEs: An Islamic Perspective
##plugins.themes.bootstrap3.article.sidebar##
Download : 30 times
##plugins.themes.bootstrap3.article.main##
Dr Syed Zahiruddin Bin Syed Musa
Abstract
The integration of Environmental, Social, and Governance (ESG) factors and circular economy practices in family-owned SMEs is increasingly recognized as essential for achieving sustainability. This study delves into how these practices can be incorporated from an Islamic perspective, providing guidelines that align with Islamic values. The urgency for sustainable business practices stems from escalating environmental crises such as climate change, resource depletion, and pollution. Family-owned SMEs, due to their inherent values and long-term orientation, are well-positioned to adopt these practices. Employing a mixed-methods approach, this research combines qualitative interviews and quantitative surveys to collect comprehensive data. The findings reveal that while family-owned SMEs acknowledge the advantages of integrating ESG and circular economy principles, they face significant challenges including financial constraints, resource limitations, and a lack of awareness. To address these issues, the study develops a framework that integrates Islamic principles, offering guidelines that are both ethically and religiously sound. Qualitative data from interviews highlight themes of ethical behavior, social justice, and environmental stewardship, while quantitative data analysis shows significant correlations between the adoption of sustainable practices and improved firm performance. The study concludes that integrating ESG factors and circular economy practices, guided by Islamic principles, can enhance the resilience and sustainability of family-owned SMEs, contributing to the achievement of sustainable development goals. The findings hold significant implications for SMEs, policymakers, and stakeholders involved in promoting sustainability in predominantly Muslim countries, suggesting that such integration not only aligns with ethical and religious values but also supports broader environmental and social objectives. By addressing the challenges and leveraging the inherent strengths of family-owned SMEs, this research provides a pathway for these businesses to contribute effectively to global sustainability efforts.
##plugins.themes.bootstrap3.article.details##

This work is licensed under a Creative Commons Attribution 4.0 International License.