ENVIRONMENTAL INITIATIVES: AN EXPLORATION OF SMALL AND MEDIUM ENTERPRISE (SMEs) RESPONSES TOWARD GREEN TECHNOLOGIES by R.Z. Raja Mohd Rasi Faculty of Technology Management, University Tun Hussein Onn Malaysia, Johore, Malaysia Email: rrajamohdrasi@swin.edu.au, aabdekhodaee@swin.edu.au, rnagarajah@swin.edu.au A. Abdekhodaee Faculty of Engineering and Industrial Sciences, Swinburne University of Technology, Vic, Australia R. Nagarajah Faculty of Engineering and Industrial Sciences, Swinburne University of Technology, Vic, Australia ABSTRACT This paper is based on an empirical study of environmental initiatives implementation in the Malaysian Small and Medium Enterprises’ (SMEs). The key focus of this study is to explore SMEs’ environmental initiatives. Environmental initiatives as defined here can be classified into three major areas: green initiatives within internal organization system, such as setting environmental goal and waste audit, environmental or green manufacturing practices, and lastly, green design orientation. This study examines the level of environmental management initiative, ranging from reactive to proactive initiatives, using a survey from SMEs in electric and electronic industry. The data from 192 manufacturing firms have been collected and tested using SPSS. Our survey strongly suggests that SMEs have moved to develop an increasingly proactive environmental orientation. It also demonstrates the importance of further investigations on: (a) environmental management systems orientation, (b) extensive study on the primary stakeholder that could effectively guide and drive SMEs’ environmental strategies, and (c) the contributory role of supply partners and the direct and indirect relationships between these systems and their performances. KEYWORDS Environmental Practices, SMEs, Proactive initiatives, Reactive Initiatives INTRODUCTION Environmental challenges have increased significantly in the last twenty years. Organizations especially small-to- medium-sized enterprises (SMEs) are under increasing pressure to maintain their operations as well as to reduce or eliminate environmental damage. The majority of studies of environmental management initiatives have been conducted in large organizations. This is unfortunate, as the SMEs, collectively represents more than 90 % of manufacturing establishment and they represent a significant share of the business sector economy. Therefore, SMEs play an imperative role in a country’s wealth and have the potential to make a significant contribution to a country’s sustainable industry. Several surveys confirm that most environmental pollution originates from SMEs. An earlier study by Smith and Kemp (1998) identify that 70 percent of manufacturing pollution by SMEs. The Marshall Report (1998) estimates that SMEs produces 60 percent of carbon emissions. More recently, a report for The European Commission, Directorate General Environment, indicates that more than 50% of commercial and industrial waste is produced by SMEs (Berends, Morère et al. 2000), whilst the Environment Agency (2003) estimates that UK SMEs are responsible for 60% of commercial waste and 80% of pollution accidents. Again, work by the Wales Environment Centre in rural Wales, indicates that around 91% of waste in the area is produced by SMEs (Berends, Morère et al. 2000). Accordingly, the environmental impacts of SMEs surpass the combined environmental consequence of large organizations (Hillary, 2000). Until recently, the drive to reduce the impact of business on the environment had been primarily focused on large organizations but all businesses, however small, have an impact on the environment.