The Effect of Green Innovation and Sustainability Report on the Financial Performance of MSMEs in Karawang

Abstract

Green practices are becoming increasingly important around the world. The performance of MSMEs is a crucial issue due to increasing consumer awareness of environmentally friendly products. Therefore, companies that do not follow green practices may face a significant decline in performance. This study aimed to identify the Green Innovation and Sustainability variables on MSME Financial Performance. This study used a quantitative method with primary data collection. The samples used were 100 Culinary-based MSMEs in Karawang. The data in this study were processed using PLS (Partial Least Square) with SmartPLS 3.0 software. The research results show that the Green Innovation variable has a significant positive effect on financial performance. Furthermore, the Sustainability variable also has a significant positive effect on financial performance. The results of this research provide important implications for MSMEs to pay more attention to and increase green innovation to achieve better financial performance.