How do dynamic capabilities affect ESG in SMEs?

Dynamic capabilities refer to the ability of a firm to adapt to changing environments by acquiring, reconfiguring, and leveraging its resources. Environmental, social, and governance (ESG) performance has been found to be positively associated with firm performance and reputation. Therefore, dynamic capabilities that enhance ESG performance can help SMEs achieve sustainable competitive advantage. Such dynamic capabilities include the ability to innovate, engage stakeholders, and effectively manage risks. Specifically, SMEs can develop new products and services that align with ESG criteria, create a culture of ethical behavior, and build relationships with stakeholders who can help them achieve their ESG goals. Overall, dynamic capabilities that foster ESG performance can lead to increased profitability, enhanced reputation, and long-term sustainability for SMEs.

This mind map was published on 22 May 2023 and has been viewed 106 times.