Understanding Factors Responsible for Framework to Design Sustainable Net Zero Policies—An Empirical Analysis on Indian Small and Medium Enterprises (SMEs)

Background: Today, SMEs play a decisive part in the developing economy; due to limited resources they frequently encounter challenges in implementing sustainabilitySustainability initiatives. Addressing the escalating concerns surrounding climate change demands urgent action in crafting sustainable net-zero policies tailored specifically for Small and Medium Enterprises (SMEs). Objectives: This study purposes to create a specialized framework for Indian SMEs to promote sustainable net zero policies, evaluating primary factors impacting policies, pinpointing obstacles to SMEs’ sustainabilitySustainability efforts, and suggesting a conceptual framework for designing sustainable net zero policies. Design/Methodology: This research utilizes a quantitative analysis approach. Primary data collection involves distributing 300 questionnaires across 30 different companies, evenly distributed among Manufacturing, Technology, Transportation, Retailers, Energy, and Hospitality and Tourism. SEM analysis is performed on 265 completed questionnaires, testing 8 hypotheses. Additionally, secondary data is collected to assess existing policies and frameworks. Findings: The study identifies key factors influencing the development of net zero policies for Indian SMEs, such as organizational empowerment, technological innovation, and alignment with Sustainable DevelopmentSustainable development Goals. Barriers to SMEs’ adoption of sustainable practices include financial constraints, lack of awareness, and regulatory challenges. Results: Proposed conceptual framework will eventually support SMEs in transitioning toward designing net Zero sustainable policies. Partnership between government, industry, and civil society is emphasized to drive collective action toward sustainable net-zero policies. Originality: This study offers original insights by addressing the specific factors essential to Indian SMEs in adopting sustainable practices and crafting tailored policy interventions. The framework takes a holistic approach, considering the unique socioeconomic context of SMEs must align with global sustainabilitySustainability objectives. Social Implications: This study recognizes the factors influencing to design Net Zero policyNet zero policy, offering potential for positive social impact. By promoting environmental stewardship, creating green jobs, and strengthening SMEs against climate risks, it supports India’s Paris Agreement commitments and encourages inclusive growth through SME involvement in sustainabilitySustainability initiatives.