The Perceived Relationship between Eco-friendly Business Practices and Firm Performance of SMEs in Vientiane Capital, Lao PDR

Abstract

This study investigates the impact of environmental performance on firm profitability in Vientiane Capital, Lao PDR. Data from 419 firms were collected using an e-questionnaire distributed through a Google form. The results indicate a need to increase awareness and acknowledgment of clean activities among surveyed firms. While there is a positive trend towards energy-saving practices and the provision of designated smoking areas, more efforts are required to encourage the wider adoption of reusable practices and prioritize proper waste management. Regression analysis reveals significant impacts on firm profitability, with firms having regulations for environmentally friendly practices, acknowledging clean activities, providing free space for waste sorting or disposal, and having designated smoking areas experiencing notable increases in profitability. However, the impact of energy-saving policies on profitability is not significant, potentially due to insufficient implementation. The study recommends implementing and enforcing effective energy-saving policies, strengthening eco-friendly regulations, encouraging waste management and recycling practices, and catering to customer preferences to enhance firm financial performance. These measures can contribute to a more sustainable and environmentally responsible business landscape in Vientiane Capital, Lao PDR.