IDEAS home Printed from https://ideas.repec.org/a/bla/bstrat/v34y2025i8p10417-10438.html

How Do SMEs Strategically Response to ESG Dynamics: Evidence From US Fashion Industry

Author

Listed:
  • Ruirui Zhang
  • Tracie Tung
  • Chunmin Lang

Abstract

As ESG reporting becomes a strategic priority, small fashion businesses in the United States face mounting institutional pressure despite limited resources and ambiguous regulatory guidance. This study explores how these firms navigate ESG disclosure by analyzing 31 institutional themes through the lens of institutional theory. Findings reveal that companies employ varied strategic responses, including avoidance, acquiescence, defiance, and compromise, depending on how they interpret and manage external pressures. These responses reflect not only resource constraints but also differing perceptions of legitimacy and strategic alignment. The paper contributes to a nuanced understanding of how small enterprises negotiate fragmented institutional environments in the evolving ESG landscape.

Suggested Citation

  • Ruirui Zhang & Tracie Tung & Chunmin Lang, 2025. "How Do SMEs Strategically Response to ESG Dynamics: Evidence From US Fashion Industry," Business Strategy and the Environment, Wiley Blackwell, vol. 34(8), pages 10417-10438, December.
    • Handle: RePEc:bla:bstrat:v:34:y:2025:i:8:p:10417-10438
    DOI: 10.1002/bse.70133
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/bse.70133
    Download Restriction: no
    File URL: https://libkey.io/10.1002/bse.70133?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ester Clementino & Richard Perkins, 2021. "How Do Companies Respond to Environmental, Social and Governance (ESG) ratings? Evidence from Italy," Journal of Business Ethics, Springer, vol. 171(2), pages 379-397, June.
    2. Nicole Darnall & Hyunjung Ji & Kazuyuki Iwata & Toshi H. Arimura, 2022. "Do ESG reporting guidelines and verifications enhance firms' information disclosure?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1214-1230, September.
    3. Sheehan, Norman T. & Vaidyanathan, Ganesh & Fox, Kenneth A. & Klassen, Mark, 2023. "Making the invisible, visible: Overcoming barriers to ESG performance with an ESG mindset," Business Horizons, Elsevier, vol. 66(2), pages 265-276.
    4. Hebah Shalhoob & Khaled Hussainey, 2022. "Environmental, Social and Governance (ESG) Disclosure and the Small and Medium Enterprises (SMEs) Sustainability Performance," Sustainability, MDPI, vol. 15(1), pages 1-18, December.
    5. Nafisa Rounok & Aimin Qian & Mohammad Ashraful Alam, 2023. "The Effects of ESG issues on investment decision through corporate reputation: Individual investors’ perspective," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 12(2), pages 73-88, March.
    6. Carmelo Reverte, 2009. "Determinants of Corporate Social Responsibility Disclosure Ratings by Spanish Listed Firms," Journal of Business Ethics, Springer, vol. 88(2), pages 351-366, August.
    7. Veronica, Scuotto & Manlio, Del Giudice & Shlomo, Tarba & Antonio, Messeni Petruzzelli & Victor, Chang, 2020. "International social SMEs in emerging countries: Do governments support their international growth?," Journal of World Business, Elsevier, vol. 55(5).
    8. William Ocasio, 2011. "Attention to Attention," Organization Science, INFORMS, vol. 22(5), pages 1286-1296, October.
    9. David Doorey, 2011. "The Transparent Supply Chain: from Resistance to Implementation at Nike and Levi-Strauss," Journal of Business Ethics, Springer, vol. 103(4), pages 587-603, November.
    10. Adriana Pigeard Muratore & Leonardo Marques, 2021. "Fashion supply chain transparency: do as I say not as I do," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 71(6), pages 2459-2478, September.
    11. Giuseppe Nicolò & Gianluca Zanellato & Benedetta Esposito & Adriana Tiron‐Tudor, 2024. "Cultural dimensions and sustainability disclosure in the banking sector: Insights from a qualitative comparative analysis approach," Business Strategy and the Environment, Wiley Blackwell, vol. 33(8), pages 8086-8101, December.
    12. Akrum Helfaya & Rebecca Morris & Ahmed Aboud, 2023. "Investigating the Factors That Determine the ESG Disclosure Practices in Europe," Sustainability, MDPI, vol. 15(6), pages 1-23, March.
    13. Dorothée Baumann-Pauly & Christopher Wickert & Laura Spence & Andreas Scherer, 2013. "Organizing Corporate Social Responsibility in Small and Large Firms: Size Matters," Journal of Business Ethics, Springer, vol. 115(4), pages 693-705, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tu, Qiang & Zuo, Limei & Liang, Anran & Yao, Ye & Liu, Diyi, 2025. "Does ESG rating divergence decrease enterprise productivity? Evidence from China," Research in International Business and Finance, Elsevier, vol. 77(PB).
    2. Wang, Yuxi & Hu, Fangjia & Wang, Yunyun, 2024. "Analyst coverage and greenwashing: Evidence from Chinese A-Share listed corporations," International Review of Economics & Finance, Elsevier, vol. 94(C).
    3. Leonardo Marques & Dafne Morais & Ana Terra, 2025. "More than meets the eye: Misconduct and decoupling against blockchain for supply chain transparency," Post-Print hal-05100211, HAL.
    4. Herrera Madueño, Jesús & Larrán Jorge, Manuel & Lechuga Sancho, María Paula & Martínez-Martínez, Domingo, 2016. "Responsabilidad social en las pymes: análisis exploratorio de factores explicativos," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 19(1), pages 31-44.
    5. Silvia Solimene & Daniela Coluccia & Stefano Fontana & Alessandro Bernardo, 2025. "Formal Institutions and Voluntary CSR/ESG Disclosure: The Role of Institutional Diversity and Firm Size," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(4), pages 5147-5166, July.
    6. Anselm Schneider & Christopher Wickert & Emilio Marti, 2017. "Reducing Complexity by Creating Complexity: A Systems Theory Perspective on How Organizations Respond to Their Environments," Journal of Management Studies, Wiley Blackwell, vol. 54(2), pages 182-208, March.
    7. Giuseppe Nicolo & Giovanni Zampone & Giuseppe Sannino & Paolo Tartaglia Polcini, 2025. "Ready for Change After the Omnibus Package? Early Compliance With the European Sustainability Reporting Standards and Its Key Determinants in the New Regulatory Era," Business Strategy and the Environment, Wiley Blackwell, vol. 34(7), pages 9040-9058, November.
    8. Siddique, Md Abubakar & Karim, Sitara & Haque, Md Reiazul & Mia, Parvez, 2026. "The truth behind sustainability claims: Examining carbon risk, ESG disclosures, and greenwashing," International Review of Financial Analysis, Elsevier, vol. 109(C).
    9. Bauckloh, Tobias & Dobrick, Juris & Höck, André & Utz, Sebastian & Wagner, Marcus, 2024. "In partnership for the goals? The level of agreement between SDG ratings," Journal of Economic Behavior & Organization, Elsevier, vol. 217(C), pages 664-678.
    10. Dang, Vinh Q.T. & Otchere, Isaac & So, Erin P.K., 2022. "Does the nature of political connection matter for corporate social responsibility engagement? Evidence from China," Emerging Markets Review, Elsevier, vol. 52(C).
    11. Yang, Yefei & Lau, Antonio K.W. & Lee, Peter K.C. & Cheng, T.C.E., 2020. "The performance implication of corporate social responsibility in matched Chinese small and medium-sized buyers and suppliers," International Journal of Production Economics, Elsevier, vol. 230(C).
    12. Xuemei Zhou & Sifeng Nian, 2024. "Sustainable Pathways: ESG Disclosure Performance and Optimization in China," Sustainability, MDPI, vol. 16(11), pages 1-25, May.
    13. Esther Ortiz & Salvador Marín & Paul Thompson, 2024. "The role of small- and medium-sized practices in the sustainable transition of SMEs," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(8), pages 19299-19323, August.
    14. Long, Rui & Fan, Zhaobin, 2025. "The impact of ESG performance on the perception of economic policy uncertainty: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1456-1474.
    15. Andrea Cardoni & Evgeniia Kiseleva, 2025. "Do SMEs have an ESG communication strategy? Exploring the quality and influencing factors of voluntary ESG disclosures using web‐based and annual report channels," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 1267-1286, January.
    16. Salma Zaiane & Dorra Ellouze, 2023. "Corporate social responsibility and firm financial performance: the moderating effects of size and industry sensitivity," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(4), pages 1147-1187, December.
    17. Nurlan Orazalin & Mady Baydauletov, 2020. "Corporate social responsibility strategy and corporate environmental and social performance: The moderating role of board gender diversity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1664-1676, July.
    18. Ron Tidhar & Benjamin L. Hallen & Kathleen M. Eisenhardt, 2025. "Measure Twice, Cut Once: Unit Profitability, Scalability, and the Exceptional Growth of New Firms," Organization Science, INFORMS, vol. 36(1), pages 88-120, January.
    19. Fereshteh Mahmoudian & Johnny Jermias, 2022. "The influence of governance structure on the relationship between pay ratio and environmental and social performance," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 2992-3013, November.
    20. Oehler, Andreas & Neuss, Charlotte, 2025. "ESG disclosure vs. ESG ratings: Consistent information value?," International Review of Financial Analysis, Elsevier, vol. 107(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:bstrat:v:34:y:2025:i:8:p:10417-10438. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-0836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.