Sustainable Value Creation as a Strategic Imperative for Green SMEs Growth: Evidence from Indonesia

Objective: This study aims to explore and understand the mechanisms of sustainable value creation (SVC) as a strategic imperative for green business growth in Indonesia, with a particular focus on how green-certified SME owners and managers experience, interpret, and operationalize sustainability within their business practices. Research Design & Methods: A qualitative research design was adopted using in-depth semi-structured interviews with 18 purposively selected informants, comprising owners, managers, and sustainability coordinators of green-certified SMEs across three provinces in Indonesia. Thematic analysis was conducted, supported by NVivo 12 software for data management and coding. Findings: Three overarching themes emerged: (1) sustainability as identity — informants viewed green practices as intrinsic to their business identity rather than as external compliance; (2) stakeholder co-creation as value amplifier — the role of customers, suppliers, and local communities in co-generating sustainability value was found to be central; and (3) the ESG–growth nexus — purposeful ESG practices were consistently linked by informants to enhanced trust, premium pricing, and market resilience. Contributions: This study provides rich, context-sensitive insights into how SVC is lived and practiced in emerging market SMEs, offering a grounded theoretical model that extends existing quantitative frameworks and informs more nuanced managerial and policy interventions. Novelty: This research is among the first to apply an interpretive qualitative lens to SVC in the Indonesian green SME context, revealing subjective meaning-making processes and informal ESG mechanisms that are invisible to survey-based approaches — thus offering a distinctive contribution to the sustainability management literature.