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

Ruirui Zhang, Tracie Tung and Chunmin Lang

Business Strategy and the Environment, 2025, vol. 34, issue 8, 10417-10438

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.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bla:bstrat:v:34:y:2025:i:8:p:10417-10438

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