1*INTI International University, Malaysia (Corresponding Author)
2Educator, M.P.S. Jugdambi, SSS, Mauritius
3Assam Down Town University, Guwahati, Assam, India
This review article critically examines the adoption of Environmental, Social, and Governance (ESG) practices in small and medium-sized enterprises (SMEs) by synthesizing the major theoretical perspectives, global barriers, and enabling strategies discussed in the literature. The study is grounded in stakeholder theory, the resource-based view, and institutional theory to explain how external pressures, internal capabilities, and regulatory environments shape ESG adoption in SMEs. The review finds that although ESG has become increasingly important for enhancing transparency, competitiveness, and long-term sustainability, SMEs continue to face significant obstacles in implementation. Key barriers include limited financial resources, lack of technical expertise, insufficient ESG knowledge, regulatory complexity, weak technological preparedness, short-term managerial orientation, and supply chain pressures. At the same time, the study highlights several enabling strategies that can facilitate ESG integration in SMEs, including access to green finance, sustainability-linked investments, capacity-building programs, peer learning, simplified ESG reporting frameworks, ethical leadership, digital transformation, and collaborative supply chain partnerships. The review further emphasizes that ESG adoption in SMEs is not shaped by a single factor but by the interaction of organizational, institutional, financial, and technological conditions. By bringing together fragmented insights from prior studies, this article offers a comprehensive understanding of how SMEs can overcome ESG adoption challenges and improve sustainability performance. The study contributes to the literature by providing an integrated conceptual perspective and practical insights for researchers, policymakers, and SME managers seeking to promote responsible and competitive business practices in a changing global environment.
Keywords: ESG Adoption, Small and Medium-Sized Enterprises (SMEs), Sustainable Business Practices, ESG Barriers and Enablers, Sustainability Governance, Economic Growth
How to cite this article: Kwan PL, Teck TS, Geok LS, Hai ST, Hui SE, Toh JS, Suhaimi M, Veerunjaysingh S, Prakash S. ESG Adoption in SMEs: A Critical Reflection on Global Barriers, Enabling Strategies, and Theoretical Perspectives. Int J Drug Deliv Technol. 2026;16(10s): 709. DOI: 10.25258/ijddt.16.10s.84
Source of support: Nil.
Conflict of interest: None