Cultural and Organisational Barriers to ESG Adoption

This chapter investigates the cultural and organisational factors that shape the adoption of environmental, social, and governance (ESG) practices within micro, small, and medium enterprises (MSMEs). It elucidates how organisational culture, leadership orientations, structural configurations, and internal governance systems influence the extent and quality of sustainability integration. The analysis identifies persistent challenges that constrain strategic engagement. Structural impediments such as hierarchical decision-making, functional compartmentalisation, and resource scarcity further inhibit systematic implementation. Furthermore, the chapter demonstrates how leadership commitment, employee participation, targeted capacity-building interventions, and governance alignment can cultivate a sustainability-oriented organisational ethos. It concludes by proposing strategic pathways to embed ESG principles into organisational identity, operational routines, and long-term enterprise strategy, thereby advancing sustained and meaningful ESG adoption in MSMEs.