Research article
● Open access
Environmental, Social, and Governance (ESG) Practices in Small and Medium-Sized Restaurants: A Qualitative Study from Macau
Abstract
Background: Environmental, Social, and Governance (ESG) practices have become increasingly important for businesses worldwide, yet research on ESG adoption in Small and Medium-sized Enterprises (SMEs), particularly in the restaurant sector, remains limited. Macau's restaurant industry, comprising over 2,400 establishments employing more than 36,000 workers, provides a valuable context for understanding how SMEs approach sustainability in a unique cultural and regulatory environment.
Objective: This study explores the specific ESG practices adopted by SME restaurants in Macau, investigates the motivations driving these implementations, and identifies the barriers and enablers influencing ESG adoption in this sector.
Methods: Employing a qualitative research design, semi-structured in-depth interviews were conducted with eight owners and managers of SME restaurants in Macau. Participants operated between one and six establishments, employing 6 to 70 individuals each. Thematic analysis was applied to interview transcripts to identify patterns, themes, and insights regarding environmental initiatives, social responsibility, governance practices, and factors affecting ESG adoption.
Results: Findings reveal that government regulations serve as the primary driver of environmental initiatives, particularly in reducing plastic usage and implementing food waste management programs. However, adoption remains uneven due to financial constraints and operational limitations such as space restrictions. Social responsibility practices, including collaboration with charitable organizations and hiring individuals with disabilities, are undertaken cautiously and often suspended during economic downturns. Fair trade product adoption faces consumer resistance due to price sensitivity. Governance initiatives focus predominantly on operational efficiency through electronic workflow adoption and risk management practices, with stakeholder relationships characterized by informal, personalized approaches rather than formal governance structures. A significant knowledge gap exists regarding ESG frameworks and certifications, with participants unaware of formal sustainability standards despite engaging in some related practices.
Conclusion: ESG adoption in Macau's SME restaurants is primarily driven by cost-saving opportunities and regulatory compliance rather than investor interest or consumer trust considerations. The sector requires tailored approaches including industry-specific ESG frameworks, financial incentives, hands-on training, and peer-to-peer learning networks to overcome adoption barriers. This study contributes to understanding how SME restaurants engage with sustainability in a context where formal ESG awareness remains limited but practical implementation is emerging through regulatory and operational drivers.
Keywords
Environmental, Social, and Governance (ESG) practices; small and medium-sized enterprises (SMEs); restaurants; sustainability; Macau; qualitative research
References
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
Braun, V., & Clarke, V. (2021). To saturate or not to saturate? Questioning data saturation as a useful concept for thematic analysis and sample-size rationales. Qualitative Research in Sport, Exercise and Health, 13(2), 201-216.
Camelo, G., & Nogueira, M. (2024). The ESG menu: Integrating sustainable practices in the Portuguese agri-food sector. Sustainability, 16(11), 4377.
Coley, D., Howard, M., & Winter, M. (2009). Local food, food miles and carbon emissions: A comparison of farm shop and mass distribution approaches. Food Policy, 34(2), 150-155.
Craig, S. (2023, April). ESG strategy and management: Complete guide for businesses. TechTarget. https://www.techtarget.com/sustainability/feature/ESG-strategy-and-management-Complete-guide-for-businesses
Dallago, B. (2000). The organisational and productive impact of the economic system: The case of SMEs. Small Business Economics, 15, 303-319.
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147-160.
Don, D. (2024, February). How to foster a collaborative work environment for greater efficiency. LinkedIn. https://www.linkedin.com/pulse/how-foster-collaborative-work-environment-greater-don-davis-phd-mba-918cc
Environmental Protection Bureau (DSPA). (2024). An overview of food waste reduction and recycling initiatives. Government of Macao Special Administrative Region. https://www.dspa.gov.mo/richtext.aspx?a_id=1533635494
Esposito, D. F. S., Scandurra, G., & Thomas, A. (2021). How stakeholders affect the pursuit of the environmental, social, and governance: Evidence from innovative small and medium enterprises. Corporate Social Responsibility and Environmental Management, 28(5), 1528-1539.
European Commission. (2022). *Annual report on European SMEs 2021/2022*. Publications Office of the European Union.
Food and Agriculture Organization. (2019). The state of food and agriculture 2019: Moving forward on food loss and waste reduction. FAO.
FoodDrinkEurope. (2020). Data & trends of the European food and drink industry 2020. https://www.fooddrinkeurope.eu/wp-content/uploads/2021/02/FoodDrinkEurope-Data-Trends-2020-dgtl.pdf
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman.
Gorman, G. E., Clayton, P. R., Shep, S. J., & Clayton, A. (2005). Qualitative research for the information professional: A practical handbook (2nd ed.). Facet Publishing.
Guillet, B. D., & Mattila, A. S. (2010). A descriptive examination of corporate governance in the hospitality industry. International Journal of Hospitality Management, 29(4), 677-684.
Haben, M. E., Enriquez, C. D. M., Dinglasan, A. P. L., Habon, R. A. C., Punzalan, P. M. G., & Pulhin, J. C. B. (2019). Impact of training and development program to employees performance and productivity. Asian Pacific Journal of Education, Arts and Sciences, 6(4), 74-83.
Herring, C. (2009). Does diversity pay?: Race, gender, and the business case for diversity. American Sociological Review, 74(2), 208-224.
Homebase Team. (2024, July). Restaurant compliance: Rules, regulations, and laws explained. HomeBase. https://joinhomebase.com/blog/restaurant-compliance-2/
Jaime, A. (2023, August). 10 effective strategies for SMEs to boost their ESG metrics. The ESG Institute. https://www.the-esg-institute.org/blog/10-effective-strategies-for-smes-to-boost-their-esg-metrics
Jenkins, H. (2006). Small business champions for corporate social responsibility. Journal of Business Ethics, 67(3), 241-256.
Karen, C. M. (1994). Restaurants: Opportunities for energy efficiency. In ACEEE 1994 Summer Study on Energy Efficiency in Buildings. American Council for an Energy-Efficient Economy.
Li, T. T., Wang, K., Sueyoshi, T., & Wang, D. D. (2021). ESG: Research progress and future prospects. Sustainability, 13(21), 11663.
Lin, M. P., Marine-Roig, E., & Llonch-Molina, N. (2022). Special dietary needs: Evidence from high-end restaurants. In Investigaciones actuales en ciencias sociales y en turismo (pp. 231-242).
Lincoln, Y. S., & Guba, E. G. (1985). Naturalistic inquiry. Sage Publications.
Magida, N. (2021). Impact of water crisis on the financial performance of fine dining restaurants in the Cape Town Metropole [Doctoral dissertation, Cape Peninsula University of Technology].
Marshall, P. A., Adebamowo, C. A., Adeyemo, A. A., Ogundiran, T. O., Vekich, M., Strenski, T., Zhou, J., Prewitt, T. E., Cooper, R. S., & Rotimi, C. N. (2006). Voluntary participation and informed consent to international genetic research. American Journal of Public Health, 96(11), 1989-1995.
Move for Hunger. (2024). Beyond the menu: Food waste in America's restaurant industry. https://moveforhunger.org/blog/beyond-menu-food-waste-americas-restaurant-industry-1
Mun, S. G., & Jang, S. S. (2018). Restaurant operating expenses and their effects on profitability enhancement. International Journal of Hospitality Management, 71, 68-76.
Namkung, Y., & Jang, S. (2007). Does food quality really matter in restaurants? Its impact on customer satisfaction and behavioral intentions. Journal of Hospitality & Tourism Research, 31(3), 387-409.
Pandey, A. (2021). *Risk management in restaurant business during Covid-19 crisis: Case study for a small Asian restaurant (X) in a medium-sized town in Uusimaa, Southern Finland* [Bachelor's thesis, Metropolia University of Applied Sciences].
Park, S. R., & Jang, J. Y. (2021). The impact of ESG management on investment decision: Institutional investors' perceptions of country-specific ESG criteria. International Journal of Financial Studies, 9(3), 48.
Parker, C. M., Redmond, J., & Simpson, M. (2009). A review of interventions to encourage SMEs to make environmental improvements. Environment and Planning C: Government and Policy, 27(2), 279-301.
Principato, L., Di Leo, A., Mattia, G., & Pratesi, C. A. (2021). The next step in sustainable dining: The restaurant food waste map for the management of food waste. Italian Journal of Marketing, 2021, 189-207.
Revell, A., Stokes, D., & Chen, H. (2010). Small businesses and the environment: Turning over a new leaf? Business Strategy and the Environment, 19(5), 273-288.
Schnell, S. M. (2013). Food miles, local eating, and community supported agriculture: Putting local food in its place. Agriculture and Human Values, 30, 615-628.
Schur, L., Nishii, L., Adya, M., Kruse, D., Bruyère, S. M., & Blanck, P. (2014). Accommodating employees with and without disabilities. Human Resource Management, 53(4), 593-621.
Seidman, I. (2006). Interviewing as qualitative research: A guide for researchers in education and the social sciences (3rd ed.). Teachers College Press.
Statistics and Census Service of Macau. (2023). Food and beverage industry survey 2022. Government of Macao Special Administrative Region.
Styles, D., Schoenberger, H., & Galvez-Martos, J. L. (2015). Water management in the European hospitality sector: Best practice, performance benchmarks and improvement potential. Tourism Management, 46, 187-202.
Sutton, J., & Austin, Z. (2015). Qualitative research: Data collection, analysis, and management. The Canadian Journal of Hospital Pharmacy, 68(3), 226-231.
Tan, B. C., Lau, T. C., Yong, G. F., Khan, N., & Nguyen, T. P. L. (2019). A qualitative study of green practices adoption for restaurants in Malaysia. Social Responsibility Journal, 15(8), 1087-1099.
United Nations Global Compact. (2004). Who cares wins: Connecting financial markets to a changing world. United Nations.
Wellton, L., & Lainpelto, J. (2021). The intertwinement of professional knowledge culture, leadership practices and sustainability in the restaurant industry. Scandinavian Journal of Hospitality and Tourism, 21(5), 550-566.
Zhang, X. (2023). How does government support promote the relationship between ESG performance and innovation? Journal of Innovation and Development, 3(2), 89-92.
Braun, V., & Clarke, V. (2021). To saturate or not to saturate? Questioning data saturation as a useful concept for thematic analysis and sample-size rationales. Qualitative Research in Sport, Exercise and Health, 13(2), 201-216.
Camelo, G., & Nogueira, M. (2024). The ESG menu: Integrating sustainable practices in the Portuguese agri-food sector. Sustainability, 16(11), 4377.
Coley, D., Howard, M., & Winter, M. (2009). Local food, food miles and carbon emissions: A comparison of farm shop and mass distribution approaches. Food Policy, 34(2), 150-155.
Craig, S. (2023, April). ESG strategy and management: Complete guide for businesses. TechTarget. https://www.techtarget.com/sustainability/feature/ESG-strategy-and-management-Complete-guide-for-businesses
Dallago, B. (2000). The organisational and productive impact of the economic system: The case of SMEs. Small Business Economics, 15, 303-319.
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147-160.
Don, D. (2024, February). How to foster a collaborative work environment for greater efficiency. LinkedIn. https://www.linkedin.com/pulse/how-foster-collaborative-work-environment-greater-don-davis-phd-mba-918cc
Environmental Protection Bureau (DSPA). (2024). An overview of food waste reduction and recycling initiatives. Government of Macao Special Administrative Region. https://www.dspa.gov.mo/richtext.aspx?a_id=1533635494
Esposito, D. F. S., Scandurra, G., & Thomas, A. (2021). How stakeholders affect the pursuit of the environmental, social, and governance: Evidence from innovative small and medium enterprises. Corporate Social Responsibility and Environmental Management, 28(5), 1528-1539.
European Commission. (2022). *Annual report on European SMEs 2021/2022*. Publications Office of the European Union.
Food and Agriculture Organization. (2019). The state of food and agriculture 2019: Moving forward on food loss and waste reduction. FAO.
FoodDrinkEurope. (2020). Data & trends of the European food and drink industry 2020. https://www.fooddrinkeurope.eu/wp-content/uploads/2021/02/FoodDrinkEurope-Data-Trends-2020-dgtl.pdf
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman.
Gorman, G. E., Clayton, P. R., Shep, S. J., & Clayton, A. (2005). Qualitative research for the information professional: A practical handbook (2nd ed.). Facet Publishing.
Guillet, B. D., & Mattila, A. S. (2010). A descriptive examination of corporate governance in the hospitality industry. International Journal of Hospitality Management, 29(4), 677-684.
Haben, M. E., Enriquez, C. D. M., Dinglasan, A. P. L., Habon, R. A. C., Punzalan, P. M. G., & Pulhin, J. C. B. (2019). Impact of training and development program to employees performance and productivity. Asian Pacific Journal of Education, Arts and Sciences, 6(4), 74-83.
Herring, C. (2009). Does diversity pay?: Race, gender, and the business case for diversity. American Sociological Review, 74(2), 208-224.
Homebase Team. (2024, July). Restaurant compliance: Rules, regulations, and laws explained. HomeBase. https://joinhomebase.com/blog/restaurant-compliance-2/
Jaime, A. (2023, August). 10 effective strategies for SMEs to boost their ESG metrics. The ESG Institute. https://www.the-esg-institute.org/blog/10-effective-strategies-for-smes-to-boost-their-esg-metrics
Jenkins, H. (2006). Small business champions for corporate social responsibility. Journal of Business Ethics, 67(3), 241-256.
Karen, C. M. (1994). Restaurants: Opportunities for energy efficiency. In ACEEE 1994 Summer Study on Energy Efficiency in Buildings. American Council for an Energy-Efficient Economy.
Li, T. T., Wang, K., Sueyoshi, T., & Wang, D. D. (2021). ESG: Research progress and future prospects. Sustainability, 13(21), 11663.
Lin, M. P., Marine-Roig, E., & Llonch-Molina, N. (2022). Special dietary needs: Evidence from high-end restaurants. In Investigaciones actuales en ciencias sociales y en turismo (pp. 231-242).
Lincoln, Y. S., & Guba, E. G. (1985). Naturalistic inquiry. Sage Publications.
Magida, N. (2021). Impact of water crisis on the financial performance of fine dining restaurants in the Cape Town Metropole [Doctoral dissertation, Cape Peninsula University of Technology].
Marshall, P. A., Adebamowo, C. A., Adeyemo, A. A., Ogundiran, T. O., Vekich, M., Strenski, T., Zhou, J., Prewitt, T. E., Cooper, R. S., & Rotimi, C. N. (2006). Voluntary participation and informed consent to international genetic research. American Journal of Public Health, 96(11), 1989-1995.
Move for Hunger. (2024). Beyond the menu: Food waste in America's restaurant industry. https://moveforhunger.org/blog/beyond-menu-food-waste-americas-restaurant-industry-1
Mun, S. G., & Jang, S. S. (2018). Restaurant operating expenses and their effects on profitability enhancement. International Journal of Hospitality Management, 71, 68-76.
Namkung, Y., & Jang, S. (2007). Does food quality really matter in restaurants? Its impact on customer satisfaction and behavioral intentions. Journal of Hospitality & Tourism Research, 31(3), 387-409.
Pandey, A. (2021). *Risk management in restaurant business during Covid-19 crisis: Case study for a small Asian restaurant (X) in a medium-sized town in Uusimaa, Southern Finland* [Bachelor's thesis, Metropolia University of Applied Sciences].
Park, S. R., & Jang, J. Y. (2021). The impact of ESG management on investment decision: Institutional investors' perceptions of country-specific ESG criteria. International Journal of Financial Studies, 9(3), 48.
Parker, C. M., Redmond, J., & Simpson, M. (2009). A review of interventions to encourage SMEs to make environmental improvements. Environment and Planning C: Government and Policy, 27(2), 279-301.
Principato, L., Di Leo, A., Mattia, G., & Pratesi, C. A. (2021). The next step in sustainable dining: The restaurant food waste map for the management of food waste. Italian Journal of Marketing, 2021, 189-207.
Revell, A., Stokes, D., & Chen, H. (2010). Small businesses and the environment: Turning over a new leaf? Business Strategy and the Environment, 19(5), 273-288.
Schnell, S. M. (2013). Food miles, local eating, and community supported agriculture: Putting local food in its place. Agriculture and Human Values, 30, 615-628.
Schur, L., Nishii, L., Adya, M., Kruse, D., Bruyère, S. M., & Blanck, P. (2014). Accommodating employees with and without disabilities. Human Resource Management, 53(4), 593-621.
Seidman, I. (2006). Interviewing as qualitative research: A guide for researchers in education and the social sciences (3rd ed.). Teachers College Press.
Statistics and Census Service of Macau. (2023). Food and beverage industry survey 2022. Government of Macao Special Administrative Region.
Styles, D., Schoenberger, H., & Galvez-Martos, J. L. (2015). Water management in the European hospitality sector: Best practice, performance benchmarks and improvement potential. Tourism Management, 46, 187-202.
Sutton, J., & Austin, Z. (2015). Qualitative research: Data collection, analysis, and management. The Canadian Journal of Hospital Pharmacy, 68(3), 226-231.
Tan, B. C., Lau, T. C., Yong, G. F., Khan, N., & Nguyen, T. P. L. (2019). A qualitative study of green practices adoption for restaurants in Malaysia. Social Responsibility Journal, 15(8), 1087-1099.
United Nations Global Compact. (2004). Who cares wins: Connecting financial markets to a changing world. United Nations.
Wellton, L., & Lainpelto, J. (2021). The intertwinement of professional knowledge culture, leadership practices and sustainability in the restaurant industry. Scandinavian Journal of Hospitality and Tourism, 21(5), 550-566.
Zhang, X. (2023). How does government support promote the relationship between ESG performance and innovation? Journal of Innovation and Development, 3(2), 89-92.