Small and Medium Enterprises in Emerging Economies : The Achilles’ Heel of Corporate ESG Responsibility Practices?
The information contained in the Enterprise Survey—administered by the World Bank (WB), the European Bank for Reconstruction and Development (EBRD), and the European Investment Bank (EIB)—is used to build a firm-level “Corporate Environmental, Soci...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/099920405102236971/IDU01017edd30483c04ca00b5c80a9eef01b5c7f http://hdl.handle.net/10986/37526 |
| Summary: | The information contained in the
Enterprise Survey—administered by the World Bank (WB), the
European Bank for Reconstruction and Development (EBRD), and
the European Investment Bank (EIB)—is used to build a
firm-level “Corporate Environmental, Social, and Governance
Responsibility” composite indicator. The novelty of the
indicator, compared with the corporate social responsibility
scores and environmental, social, and governance (ESG)
scores already available, is due to its unique coverage,
namely, a large number of private sector small and
medium-size enterprises in selected emerging economies (more
than 40 economies covered by the Enterprise Survey). The
composite indicator summarizes information on private sector
actions on environmental, social, and governance factors.
The analysis shows that the actions of private sector small
and medium-size enterprises in emerging economies to foster
sustainability and green growth significantly lag in the
transition to a more sustainable business environment, and
large gaps persist. Among emerging economies, those in the
Middle East and North Africa—which deserve special attention
due to the urgent need to green their growth model—are among
the worst performers. Larger companies in the Middle East
and North Africa show better environmental, social, and
governance performance than small and medium-size
enterprises in other areas; but smaller firms in the Middle
East and North Africa show extremely weak performance in
many aspects, even if controlling for the relative level of
economic development. The weakness of environmental, social,
and governance practices among firms in the Middle East and
North Africa is due to the social (with large gaps in female
participation in the workforce and management) and
environmental topics. This calls for urgent policy action to
address such weaknesses and exploit the full potential of
the region. |
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