Shaping the Future of Environmental Sustainability in SMEs : A Hybrid NGT and Grey AHP Approach

ABSTRACT The manufacturing sector is crucial for sustainable development, with Small and Medium Enterprises (SMEs) constituting 90% of businesses and aiding exports and job creation. This study examines environmental sustainability challenges in manufacturing SMEs and ranks standards and disclosures using Modified Nominal Group Technique (M‐NGT) and Grey Analytic Hierarchy Process (Grey‐AHP). The research produced a materiality matrix for environmental challenges and proposed benchmarks for SMEs' sustainability standards. Reporting Environmental, Social, and Governance (ESG) metrics is expected to provide strategic environmental solutions. This is the first effort to create a Global Reporting Initiative (GRI) compliant environmental reporting framework for Indian manufacturing SMEs. The study enhances understanding of SMEs' role in national sustainability by integrating the materiality matrix with environmental needs. It highlighted the importance of environmental reporting in promoting awareness, accountability, and compliance understanding. Smaller enterprises will learn to recognize climate change and meet environmental standards. These efforts will help mitigate the costly ESG reporting process, especially Scope 3. This research is one of the first in India to utilize NGT and grey theory for developing sustainability reporting standards and protocols for manufacturing SMEs, using the GRI framework.