The Level of Engagement of Small and Medium Enterprises in Sustainable Finance

This study explores the critical role of small and medium enterprises (SMEs) in sustainable finance, focusing on their engagement across environmental, social, and governance (ESG) dimensions. Using the ESG Model as a framework, the research assesses how SMEs in Las Piñas, Muntinlupa, and Parañaque approach sustainability in their business operations. Employing a descriptive-comparative method, the researcher surveyed 130 SMEs through a meticulously crafted questionnaire, with reliability scores of 0.94 (Environmental), 0.93 (Social), and 0.91 (Governance), ensuring robust data collection. The findings reveal that most SMEs are medium-sized corporations with a primary focus on construction management, generally operating for 6-10 years and earning between PHP 750,000-1,500,000 annually. While SMEs demonstrate moderate engagement in sustainable finance, a significant number prioritize survival over sustainability investments, hindered by factors such as access to finance, knowledge gaps, risk perception, and regulatory constraints. Notably, the study underscores the pivotal role of government and financial institutions in providing the necessary support to overcome these barriers and promote more profound engagement in sustainable finance. This research offers valuable insights into the current state of SME involvement in sustainability, paving the way for targeted interventions that can drive long-term growth and responsible business practices. Keywords: Engagement, Environmental, Social, and Governance (ESG), Small and Medium Enterprises (SMEs), Sustainable Development Goals, and Sustainable Finance