Barriers to sustainability certification among MSMEs: Evidence from India's ZED scheme

Sustainability certification has emerged as an important policy instrument for promoting responsible manufacturing practices among Micro, Small, and Medium Enterprises (MSMEs). However, evidence on the factors influencing certification adoption remains limited, particularly in emerging economies. This study examines the factors associated with adoption and perceived barriers related to India’s Zero Defect Zero Effect (ZED) certification using matched data from 92 manufacturing MSMEs in Haryana, comprising 46 ZED-certified and 46 non-certified firms. The certified sample is restricted to Silver and Gold categories, which involve externally verified assessment mechanisms. The empirical analysis combines descriptive statistics, Mann–Whitney U tests, Firth logistic regression, ordered logistic regression, and marginal effects analysis. The findings indicate that sustainability awareness and understanding, together with prior certification exposure, are consistently associated with certification adoption and progression across certification levels. In contrast, structural characteristics such as firm size, sector, and firm age do not exhibit statistically significant associations. Although non-certified firms report high levels of perceived barriers, particularly supply chain complexity, resistance to change, and measurement difficulties, these factors do not emerge as the primary empirical factors associated with certification adoption. The findings suggest that certification engagement among MSMEs is more closely associated with cognitive readiness and accumulated organisational capability than with observable structural attributes. Overall, the results highlight the importance of awareness-building and capability development for expanding MSME participation in sustainability certification schemes. Given the cross-sectional design, the findings are interpreted as associational rather than causal.