MSMEs Gear Up to Broaden Environmental Policies, Finds SIDBI D&B SPeX

One of the highest levels in recent years, the index reflects growing willingness (+3%) despite softer awareness and implementation.

Mumbai, October 14, 2025: Dun & Bradstreet, a leading global provider of business decisioning data and analytics, along with SIDBI, released Sustainability Perception Index (SPeX), referred as the ‘Green Pulse Indicator’ for April -June 2025 period. SPeX evaluates MSME’s perception of sustainability across three dimensions: willingness, awareness, and implementation. The SPeX rose by 20% year-on-year to reach 65 in Q2 2025, marking one of the highest levels in recent years. The overall trend remains upward, despite a few quarterly pullbacks. While awareness and implementation show some moderation, the continued rise (+3%) in willingness points to strong intent that can be converted into action with the right support.

The index ranges from 0 to 100. Higher the index, higher is the level of perception towards sustainability.

Source: SIDBI - D&B Sustainability Perception Index Survey, April - June 2025

Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet, said, “MSMEs are steadily advancing on their sustainability journey, as reflected in the 20% year-on-year rise of the SPeX Index to 65 in Q2 2025, one of the highest levels recorded in recent years. The momentum, though marked by occasional retracements, signals a growing maturity in the way small and medium businesses view sustainability. Encouragingly, willingness to act is rising, with younger enterprises especially embracing green practices as part of their brand and growth strategy. Medium enterprises are setting the pace with strong implementation, while sectors like capital goods are still in the data-gathering stage. Regulation and cost efficiency continue to drive action. Notably, MSMEs are prioritizing environmental and governance goals, with DEI still playing a secondary role. The path forward is clear, simplifying certification processes and expanding access to technical expertise will be crucial to sustain this momentum and enable MSMEs to transition from intent to impact, ensuring they remain resilient, competitive, and aligned with global standards. For MSMEs, this evolution is not just about compliance, it marks a strategic shift toward long-term value creation, market differentiation, and future-readiness in an increasingly sustainability-driven economy.”

Dr. Ravindra Kumar Singh, Chief General Manager, Green Climate Finance Vertical, SIDBI stated, “SIDBI - D&B Sustainability Perception Index Survey (which we term as “Green Pulse) for the Quarter April – June 2025, highlights improved &growing commitment from MSMEs towards sustainability. Periodical SPeX reports render transitional views to us.   The latest findings reveal that 66% of MSMEs are planning to expand their environmental policies, while 76% anticipate profitability gains from these measures. Results indicate that enterprises are turning increasingly responsive and are inclined to prioritise adoption of clean, green, and environment-friendly technologies, along with becoming more responsive to Environment & Social (E&S) factors. To address the capital needs of MSMEs, SIDBI's Green Scheme(s) are gearing the market in different and focussed arenas of sustainability including Energy Efficiency, Renewable Energy, E-Mobility and Circular Economy and Adaptation. The GIFT & SPICE schemes of MoMSME being implemented by SIDBI (directly as well as through 25 lending partners) are rendering momentum to green investments. Any loan to qualify as a Green Loan has to go through the filter of Green definitional framework, E&S framework, Green Technology Basket, such that energy saving and/or GHG emissions reductions are measured and tracked. SIDBI has been operating theme risk mitigant models to attend to perceived risks of innovative, new technologies or models. SIDBI is committed for sharpening responsive vision and green growth path of MSMEs. If you are thinking about green investments, meet your lenders.”

Highlights of the SPeX Report – Q2 2025

Overall Trends

• The SPeX Index rose 20% YoY to 65, underscoring MSMEs’ strengthening commitment to sustainability.
• 66% of MSMEs plan to expand environmental policies, while 76% expect profitability gains from sustainability measures.
• Profitability and cost reduction remain the strongest motivators, but uncertain returns and limited capital continue to hold back investments.
• Green financing awareness increased across all segments, with younger and micro businesses leading the way.
• Governance implementation strengthened across enterprise sizes, particularly among micro and medium firms.
• ESG integration is deepening, with financial literacy and clearer policy communication emerging as key enablers for wider adoption.

Awareness

• Awareness moderated slightly, especially among small enterprises.
• While green financing awareness is high, policy literacy remains weak: nearly half of young firms (under 5 years) are unaware of government support programs.
• Younger businesses (under 25 years) boosted green financing uptake by 14%, using it as a lever for brand positioning and future readiness.
• Micro enterprises showed early governance adoption (50% implementation), while medium firms lead implementation at 64.7%, with full adoption in six states.
• The capital goods sector remains in an early, data-gathering phase.

Willingness

• Willingness rose +3% QoQ, reflecting resilience in MSMEs’ sustainability intent.
• Regulatory compliance (66%) and cost efficiency remain the strongest drivers, especially among businesses aged 1–10 years.
• Internal stakeholder influence continues to have limited impact.
• Full environmental implementation has been achieved in 13 of 21 states, with Kerala and Madhya Pradesh leading.
• Social measures are gaining traction: 73% of small and 75% of medium businesses are actively implementing social parameters, with full adoption in Andhra Pradesh, Tamil Nadu, and Uttar Pradesh.
• Micro and medium firms are leading the formalization of sustainability policies and governance procedures, with 53% of medium and 60% of micro firms strengthening governance commitments.

Implementation

• Rapid progress in capability-building: 60% of MSMEs have developed expertise in sustainable strategy (vs. 13% in Q4 2024).
• Medium firms are leading circular economy practices: 65% implemented “reduce-reuse-recycle” measures, up from 31% in Q1 2025.
• Among younger firms, 53% (1–5 years) report full compliance to sustainability policies.
• Key barriers remain:
  • 65% cite lack of capital availability.
  • 75% of younger businesses say capital constraints delay implementation.
  • 63% of 5–10 year and 60% of 10–25-year firms cite uncertain returns as the main deterrent.
• Kerala and Madhya Pradesh stand out for full environmental implementation among micro and medium firms.
• States like Kerala (90%), Telangana (88%), and Chhattisgarh (84%) show high sustainability familiarity, while Maharashtra lags with only 50% medium industry awareness.

Methodology

The SPeX Index ranges from 0 to 100 and tracks MSMEs’ evolving perception of sustainability. Movements in the index reflect changes across three key dimensions:

• Awareness – understanding of sustainability measures and policy support.
• Willingness – intent and motivation to adopt sustainability practices.
• Implementation – actual execution of sustainability actions.

An increase in the SPeX value indicates strengthening perceptions and adoption momentum, while a decline signals emerging challenges or weakening sentiment.