Abstract:
Medium-sized Enterprises (SMEs) in Sri Lanka, focusing on both the barriers and
opportunities they face. Despite being a critical component of the Sri Lankan
economy, SMEs encounter significant challenges such as financial constraints, lack
of technical expertise, and insufficient regulatory support. Carbon accounting is not
only crucial for environmental sustainability but also enhances operational efficiency,
risk management, and access to green financing, contributing to long-term business
sustainability.
Design/Methodology/Approach: A mixed-methods approach was adopted,
integrating quantitative surveys and qualitative interviews across various sectors to
provide a comprehensive understanding of carbon accounting adoption.
Findings: The findings reveal that although awareness of carbon accounting is
increasing, implementation rates remain low. Key barriers include limited access to
relevant technologies, inadequate financial resources, and a lack of expertise,
especially for domestically-focused SMEs. In contrast, SMEs involved in
international trade demonstrate a higher propensity for carbon accounting adoption
due to external regulatory pressures and competitive demands.
Practical implications: The study highlights significant opportunities for SMEs
adopting carbon accounting, including enhanced access to green financing, improved
market reputation, and better alignment with international sustainability standards.
These benefits contribute to operational efficiency and offer a strategic advantage in
competitive markets.
Originality value: This research provides valuable insights into the challenges and
benefits of carbon accounting adoption among SMEs in Sri Lanka, a relatively
underexplored area in the literature. The study concludes with actionable
recommendations for policymakers, emphasizing the importance of developing
sector-specific frameworks, financial incentives, and capacity-building programs to
help SMEs overcome existing barriers. These measures are essential for promoting
widespread carbon accounting adoption, thereby enhancing the sustainability and
global competitiveness of Sri Lankan SMEs.
