Analysis of Opportunities and Challenges of ESG Implementation in the Financial Statements of MSMEs in West Java: A Qualitative Perspective

Abstract

This study aims to qualitatively analyze the opportunities and challenges in the implementation of Environmental, Social, and Governance (ESG) principles in the financial statements of Micro, Small, and Medium Enterprises (MSMEs) in West Java Province. By utilizing descriptive data from a survey of 100 MSME players and reviewed through the theoretical approaches of Stakeholder Theory and Institutional Theory, this study explores structural barriers and strategic potentials in the implementation of ESG. The findings show that the main constraints include low understanding of ESG regulations, limited resources, and administrative complexity. On the other hand, there are significant opportunities in the form of increased access to funding, business reputation, and long-term competitiveness. This study suggests the need for affirmative policies and continuous training to make ESG integration more inclusive and applicable in the MSME sector.