Abstract
This research aimed to examine Sustainable Business Practices and their effects on Corporate Social Responsibility among small and medium-sized enterprises (SMEs) in Kigali City, Rwanda. This study was guided by three specific objectives which were; To assess the effect of the Use of Renewable Energy on Corporate Social Responsibility among SMEs in Kigali City, Rwanda. To determine the influence of Ethical Sourcing on Corporate Social Responsibility among SMEs in Kigali City, Rwanda. To identify the effect of Community Engagement on Corporate Social Responsibility among SMEs in Kigali City, Rwanda. Theoretically this research considered three theories in its investigation and these included the Stakeholder theory, the Institutional theory, and last but not least Resource-Based View (RBV) theory. This research study adopted a descriptive and correlational research design. And for the purposes of this study, the target population was narrowed down to SMEs in Kicukiro District, bringing the total population under investigation to 1,756. The sample size for this study was 326 respondents, which was determined using Slovin’s formula. The sampling technique employed in this study was simple random sampling, complemented by a census approach. The data collection instruments for this study included structured questionnaires and semi-structured interviews and the analysis of data for this this study was based on data from questionnaires and interviews using quantitative (descriptive and inferential statistics in SPSS) and qualitative (thematic analysis) methods. Results were presented through tables, charts, and narratives, providing a nuanced understanding of the research topic. The research revealed significant findings. The study showed that SMEs in the district prioritize incorporating renewable energy sources, with 73.01% agreeing and 19.02% strongly agreeing, resulting in a mean of 4.07 and a standard deviation of 0.59. Moreover, SMEs actively seek to improve energy efficiency (75.15% agreeing, 18.40% strongly agreeing, mean = 4.10, std dev = 0.56) and reduce carbon emissions (77.00% agreeing, 16.87% strongly agreeing, mean = 4.08, std dev = 0.55). They also invest in renewable energy technologies (73.31% agreeing, 19.63% strongly agreeing, mean = 4.10, std dev = 0.55) and promote waste reduction and recycling (76.07% agreeing, 17.18% strongly agreeing, mean = 4.07, std dev = 0.55). Additionally, the study found that SMEs prioritize ethical sourcing, with a mean of 4.20 and a standard deviation of 0.49, and engage in community development through employee volunteer programs (73.62% agreeing, 21.47% strongly agreeing, mean = 4.15, std dev = 0.57) and partnerships with local NGOs (75.15% agreeing, 19.02% strongly agreeing, mean = 4.13, std dev = 0.56). The analysis also revealed a strong positive correlation (0.749**) between sustainable business practices and corporate social responsibility, indicating that higher implementation of sustainable practices is associated with enhanced CSR activities. This research investigation using its findings to conclude that there exist a strong commitment of SMEs in Kicukiro District to sustainable practices and CSR, highlighting the importance of integrating sustainability into business operations for greater social impact. Basing of the study findings recommendations include prioritizing renewable energy use, practicing ethical sourcing, engaging with local NGOs, encouraging employee involvement, and providing government and industry support. Further studies could explore sustainable practices' long-term impact on CSR, government policies' role, adoption barriers, regional practice comparisons, consumer influence, financial performance, employee satisfaction, and training program impacts on SMEs' sustainability and CSR capacity.