Towards sustainable development in industrial small and Medium-sized Enterprises: An energy sustainability approach

Abstract

Abstract In the quest for global sustainability, the manufacturing sector holds immense potential. Pinned under the regulatory and market pressures, large-sized manufacturing enterprises have started reporting their sustainability efforts as per established guidelines. Small and medium-sized enterprises (SMEs), on the other hand, playing an even greater role of optimizing the economic structure and social stability of developed and developing economies. Ironically, they struggle more to expand and communicate the sustainability efforts to their stakeholders. Thus, the objective of this study is to develop an easy-to-implement managerial framework for guiding the visualization, implementation and reporting of energy sustainability (ES) for industrial enterprises. To address this objective, a three-step ES framework was developed through a systematic literature review and an iterative process of longitudinal action research in two medium-sized industrial enterprises from geographical cluster of foundry and textile SMEs in India. The three core steps of framework emphasize on energy management organization (with energy management function and roles), energy visualization and optimization (by understanding energy use patterns to identify ES opportunities) and ES reporting (internal and external reporting based on GRI guidelines). The ES framework was validated through action research at two medium-sized SMEs operating in foundry and textile sector in India. While the foundry unit saved production costs of USD 9019/annum, mitigated CO2 emissions of 100.29 t (CO2)/annum and improved employee retention by 32%, the post-implementation benefits gained by the textile unit was cost saving of USD 2486/annum, emission mitigation of 41.36 t (CO2)/annum and an eco-label certification. The study contributes to sustainability management literature by adopting an operative perspective of evaluating sustainability impact of shop-floor-level activities. Its contribution to energy management literature is in expanding the scope of energy optimization initiatives to realizing holistic sustainability benefits.