The objective of this study is to analyse the impact of ESG practises (ESG) and Entrepreneurial Orientation (EO) on Environmental Performance (EP) in MSMEs in the Smart cities. This looks at whether Green Innovation (GI) is the connecting link between these elements and improved environmental outcomes while analyzing the role of Digital Transformation (DT) and Environmental Uncertainty (EU) in these linkages. A cross-sectional study of 218 MSME proprietors and managers was analysed using the partial least square structural equation modelling. The research examined direct, mediating and moderating relationships and used importance-performance analysis to identify the factors that have the greatest impact on EP. The ESG improved the EO and supported the development of GIs and EP. EO has been a strong catalyst for GI that has, in turn, produced the greatest environmental benefits. GIs helped to foster the relationship between EO and performance, but did not mediate the relationship between ESG and performance. The associations examined were not affected by DT and EU. GI and EO were the most important factors for improvement of EP. This study gives a context-specific elucidation of the interplay among sustainability intention and EO and innovation capability in resource constrained MSMEs. It explains the instances where ESG lead to measurable environmental improvements and shows that DT and EU do not act as major boundary constraints in low-capability environments. The findings offer clear targets for MSMEs wishing to improve EP and increase understanding of sustainability paths in emerging economy Smart Cities.
Sandhya et al. (Tue,) studied this question.