How can we support SMEs on their sustainability journey? Addressing the gaps in research and practice

Abstract

Small and medium-sized enterprises (SMEs) play a critical role in the transition toward sustainable business practices. However, they face significant barriers, including financial constraints, limited internal expertise, and fragmented regulatory support. Despite the increasing focus on corporate sustainability, a significant gap remains in the literature regarding structured support mechanisms for SMEs in their sustainability transitions. Existing research often fails to account for the highly context-dependent challenges SMEs face. This study addresses this gap by examining the key barriers and enablers of SME sustainability and proposing a concrete methodological approach to co-develop tailored support mechanisms in collaboration with stakeholders. Through a systematic literature review, this study identifies financial and regulatory incentives, capacity-building initiatives, and multi-stakeholder collaboration as critical enablers of SME sustainability. Additionally, it highlights the shortcomings of current research, which largely relies on cross-sectional analyses and lacks iterative, practice-oriented methodologies. By integrating theoretical insights with real-world applications, this study contributes to both academic discourse and practical sustainability strategies for SMEs. By leveraging Action Research, this study advocates for an adaptive, participatory approach that enables SMEs to navigate sustainability transitions through continuous feedback loops and stakeholder engagement. The findings emphasize the need for long-term, context-specific interventions and call for further research into collaborative support mechanisms that align with SMEs’ unique operational realities. Ultimately, this study provides a structured pathway for advancing SME sustainability while addressing a critical methodological gap in existing literature.