Sustainability Practices And Firm Financial Performance Among Small And Medium Size Enterprises In The Ashanti Region Of Ghana

Abstract

The study sought to examine sustainability practices and financial performance among firms based in the Ashanti region of Ghana. The study assessed the direct effects of environmental sustainability, social sustainability and economic sustainability on the performance of SMEs in the Ashanti Region. The study is quantitative, non-experimental, and adopts survey and cross-sectional research designs. SMEs in the Ashanti Region of Ghana formed the population. Structured questionnaire was used as the data collection instrument. Stratified sampling technique was used to select 408 respondents. Ordinary Least Squares regression was used as the analysis technique. Environmental and economic sustainability were found to positively and significantly affect SMEs performance in the Ashanti Region. However, social sustainability had a negative but statistically insignificant effect on the performance of SMEs in the Ashanti Region. The study recommends that the management of SMEs should consider the effects of their activities on the planet and people in order to maximize profit. This helps the firms to avoid incurring significant costs such as environmental maintenance costs, environmental penalties, wrath from society for unsustainable environmental practices and the like, which will affect their profitability if the stakeholders are not considered in their business processes or activities. Additionally, it is recommended that firms should seek to improve their brand image through sustainability practices. Their activities should be carried out in a manner that attracts the attention of stakeholders such as shareholders, suppliers, the government, etcetera, to improve the firm's reputation.