Sustainable energy strategies among small and medium-scale enterprises: The mediating role of business associations

Small and medium-scale enterprises increasingly show greater interest in managing their environmental footprints in response to shifting customer preferences. Beyond the mixed results in the literature exploring environmental concerns from an organisational perspective, questions related to firm strategy and energy efficiency have yet to be definitively determined. This study investigated the mediating role of business associations in the relationship between firm strategy and energy efficiency among small and medium-scale enterprises. Using binary logit regression, data from over 20,000 firms across 39 countries were analysed. Our analysis demonstrates that business strategy positively impacts climate-friendly energy generation, energy management, and energy consumption improvements. Furthermore, business associations were found to significantly mediate these relationships. A comparative analysis revealed some differences across economic regions, with the impact of business strategy being more pronounced in the Middle East and Africa compared to other regions of the world. The present findings suggest that improving small and medium-scale enterprises’ affiliations to business associations is a promising approach to increasing their adoption of sustainable energy practices. The study findings further advance the understanding of the firm strategy-energy efficiency nexus, and have implications for policymaking in environmental performance enhancement.