The social-environmental sustainability paradox: how social strategies affect environmental strategies in SMEs

This paper addresses the research problem of the paradoxical relationship between social and environmental strategies in small and medium enterprises (SMEs). Although tensions in balancing a triple bottom line (3BL) are known, research rarely explores social–environmental tensions. Clarifying their alignment may enhance sustainable integration in SMEs. Our analysis reveals a paradox: at lower intensities, both proactive and leadership social strategies reduce the likelihood of adopting environmental strategies, even among firms committed to the 3BL. As their intensity increases, however, these social strategies–especially leadership– eventually compensate for this effect and facilitate environmental improvements, evolving this way to become synergetic. Based on a sample of 191 B Corp-certified SMEs from Peru, Colombia, and Spain, these findings have direct implications for policy and practice. Recognizing the non-linear dynamics between social and environmental strategies can guide policymakers and practitioners in designing targeted incentives, allocating resources, and supporting SMEs in moving beyond a suboptimal state where neither social nor environmental goals are fully achieved, towards truly integrated sustainable business models.