ESG Integration in Green Accounting for Furniture SMEs: A Model for Measuring Social and Environmental Impact to Support Business Sustainability

Abstract

This article aims to develop a model for measuring social and environmental impact based on ESG in green accounting practices for furniture SMEs. Sustainability issues encourage business players to evaluate performance not just through profit, but also through environmental, social, and governance responsibility. Although ESG has been widely applied in large companies, its implementation in SMEs is still limited due to low sustainability literacy, limited record-keeping, and the lack of simple instruments. This study uses a qualitative descriptive approach through literature review of scientific articles, sustainable finance regulations, and institutional data related to SMEs and the furniture industry. The study results show that green accounting can serve as a basis for ESG implementation operations because it can identify energy use, raw materials, production waste, workplace safety, and business governance practices. This article offers an ESG measurement model consisting of environmental, social, and governance indicators that can be recorded monthly by furniture SMEs. The model is expected to help SMEs improve cost efficiency, business transparency, reputation, access to financing, and long-term sustainability.