Innovative Combinations of ESG and Green Finance: FSQCA Insights into Moroccan SMEs’ Water Resilience

Abstract

Water resilience is becoming a strategic concern for SMEs operating in water-stressed environments, yet limited research has examined how ESG practices and green finance combine configurationally to support resilience, particularly among water-sector SMEs in emerging economies. This study addresses this gap by examining alternative configurations of environmental practices (E), social practices (S), governance (G), and green finance (GF) associated with high water resilience (WR) in Morocco. Using fuzzy-set Qualitative Comparative Analysis (fsQCA) on 73 cases, the study evaluates necessity and sufficiency relationships and identifies multiple pathways to the outcome. The necessity analysis shows that no individual condition is necessary for high WR. The intermediate solution identifies three sufficient configurations: ES, EGF, and G*GF, with overall solution consistency of 0.843, PRI of 0.740, and coverage of 0.807. These results demonstrate equifinality, meaning high water resilience can be achieved through different combinations of sustainable organizational practices and financial conditions, not through one best practice or pattern. This paper adds a configurational perspective to the ESG, green finance, and water-resilience research streams and has policy implications for differentiated resilience and financing support for water-sector SMEs.

JEL Classification: Q01; Q25; G23; M14.

Paper type: Empirical research article.