Analyzing the ESG practices of high-performing SMEs through DEA methodology
DOI:
https://doi.org/10.14267/VEZTUD.2025.06.01Keywords:
SME, ESG, DEA, financial performanceAbstract
As society places greater emphasis on sustainability, ESG (Environmental, Social, and Governance) factors have gained prominence in the corporate sector. The European Union’s ESG reporting requirements, beginning in 2025, will largely target large firms with substantial financial performance; however, these measures will indirectly affect SMEs via their business networks. Nonetheless, a knowledge deficit exists about the contemporary ESG practices within the SME sector. This study seeks to examine the ESG practices implemented by financially prosperous SMEs. The author utilizes the Data Envelopment Analysis (DEA) methodology to connect intricate financial and ESG performance, as it enables the integration of explanatory (input) and explained (output) variables into a unified model without necessitating prior assumptions regarding their functional relationship. The findings demonstrate that the ESG performance of the examined SMEs is shown in cost reduction, quality enhancement, employee satisfaction, workplace stability, proficient leadership, and efficient risk management.
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