The Relationship between Energy Efficiency in Halal MSMEs and Business Profitability and Sustainability: A Case Study in Bandung City, 2021–2023

Risa Ratna Gumilang

Authors

Risa Ratna Gumilang Universitas Sebelas April Author

Keywords:

energy efficiency, halal MSMEs, profitability, SDGs, sustainability

Abstract

This study investigates the relationship between energy efficiency practices and their impact on profitability and business sustainability among halal micro, small, and medium enterprises (MSMEs) in Bandung City, Indonesia, during 2021–2023. As energy costs represent a significant share of MSMEs’ operational expenditures, improving energy efficiency is expected to enhance both financial outcomes and long-term resilience, aligning with Sustainable Development Goals (SDGs). Using a mixed-method approach, the research combined survey data from 120 halal MSMEs with in-depth interviews and financial performance analysis. Quantitative data were analyzed using regression modeling to examine the correlation between energy-saving interventions and profitability, while qualitative insights explored managerial perspectives on sustainable practices. The results demonstrate a statistically significant positive relationship between energy efficiency adoption and profitability, with enterprises reporting an average reduction of 12–18% in energy costs, contributing to a 9–14% increase in net profit margins. Furthermore, MSMEs with systematic energy management practices exhibited stronger long-term sustainability indicators, including enhanced market competitiveness, customer trust linked to halal and green business practices, and improved compliance with government energy efficiency programs. The study also highlights barriers such as limited access to financing for green technology and lack of technical expertise, which hinder broader adoption. The findings suggest that energy efficiency is not only a cost-reduction strategy but also a pathway to sustainable growth in halal MSMEs. Policy implications emphasize the need for integrated support mechanisms combining financial incentives, capacity building, and regulatory frameworks tailored to small businesses.

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