Carbon Footprint Reduction and Green Manufacturing Performance: An Empirical Investigation Across Small and Medium Enterprises in Developing Nations

Abstract

Green manufacturing has emerged as an indispensable strategic response to escalating environmental regulations, resource scarcity, and shifting stakeholder expectations in the global industrial landscape. This study investigates the relationship between carbon footprint reduction initiatives and green manufacturing performance (GMP) among small and medium enterprises (SMEs) in three developing nations: India, Norway (as a comparative benchmark), and Oman. Drawing on primary survey data collected from 94 manufacturing SMEs and supplemented by plant- level carbon audit data, the research evaluates the effectiveness of six green manufacturing practices — energy efficiency improvement, waste minimisation, green procurement, cleaner production technologies, environmental management systems (EMS), and eco- design — in reducing carbon emissions and enhancing operational performance. A composite Green Manufacturing Performance Index (GMPI) is developed and validated using confirmatory factor analysis (CFA). Results indicate that energy efficiency improvement and cleaner production technologies are the most impactful practices, contributing an average carbon intensity reduction of 28.6% and 23.4% respectively. Firms with certified ISO 14001 EMS demonstrate significantly superior GMPI scores (mean difference = 0.312, p < 0.001). The study further reveals that government policy incentives and top management commitment are critical moderating factors in green manufacturing adoption among SMEs in developing nations. Practical implications and policy recommendations are discussed.