Environmental responsibility in SMEs: does it deliver competitive advantage?

Abstract Small and medium sized enterprises (SMEs) can gain a competitive advantage and create sustainable business by adopting environmental good practices. However, the perceptions of SMEs and their approach to environmental improvements suggest that there are some fundamental misunderstandings and difficulties in achieving this in practice. A questionnaire‐based study of SMEs and their responses to the current requirements of environmental good practice was carried out in South Yorkshire. Follow‐up interviews and factory visits were also carried out. The study aimed to assess the ability of SMEs to create a competitive advantage by adopting environmental good practice and making environmental improvements to their business. The main findings were that most organizations surveyed believed environmental issues to be issues affecting their business. However, the meeting of these requirements was seen as a cost that was not transferable to customers in terms of added benefits and few organizations could show that it led to a competitive advantage. Copyright © 2004 John Wiley & Sons, Ltd and ERP Environment.