Environmental Sustainability Practices and Financial Performance of Manufacturing MSMEs in Tagum City, the Philippines

Abstract This study explores how environmental sustainability practices impact the financial performance of manufacturing MSMEs in Tagum City, grounded in the Resource-Based View (RBV) and Natural Resource-Based View (NRBV) theories. Using a quantitative, non-experimental correlational design, data were gathered from 255 respondents through validated questionnaires. Results show that waste management had the highest level among sustainability practices, while liquidity topped financial performance indicators. Key sustainability areas—water conservation, waste management, and energy efficiency—were found to significantly influence financial outcomes. These findings affirm that strategic environmental practices serve as valuable internal resources, offering a sustainable competitive edge. The study recommends that MSMEs strengthen efforts in these three areas. Additionally, it urges LGUs and the Department of Trade and Industry to implement supportive policies, including tax breaks, grants, and green financing. Doing so will encourage MSMEs to adopt eco-friendly technologies. Aligning sustainability with profitability presents a viable path to long-term business success.